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Published on January 29, 2016

For more course tutorials visit www.uophelp.com This exam consists of 10 multiple choice and true/false questions. 1. Question : Butler Corp paid a dividend of $3.50 per share. The dividend is expected to grow at a constant rate of 8% per year. If Butler Corp. Is selling for $75.60 per share, the stockholders' expected rate of return is _________ 2. Question : Emery Inc. has a beta equal to 1.5 and a required return of 14 % based on the CAPM. If the risk free rate of return is 2%, the expected return on the market portfolio is _______________. 3. Question : The capital asset pricing model _________. 4. Question : Stock A has an expected return of 14 % with a standard deviation of 6%. If returns are normally distributed, then approximately two-third of the time the return on Stock A will be _______. 5. Question : A corporate coup bond has a coupon rate of 9%, a face value of $1,000, and matures in 15 years. Which of the following statements in most correct? 6. Question : Investment A has an expected rate of return of 15 % per year, while investment B has an expected rate of return of 12 % per year. A rational investor will choose _________. 7. Question : A financial analyst tells you that investing in stocks will allow you to triple your money in 15 years. What annual rate of return is the analyst assuming you can earn? 8. Question : SWH Corporation issued bonds on January 1, 2004. The bonds had a coupon rate of 4.5%, with interest paid semiannually. The face of the bonds is $1,000 and the bonds mature on January 1, 2014. What