Bus 401 Week 2 Quiz Uop Exam Assignment

BUS 401 Week 2 Quiz

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1.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 _________

1. 12.63%

2. 12.53%

3. 13.00%

4. 14.38%

2. 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 _______________.

1. 10%

2. 9%

3. 8%

4. 6%

3.The capital asset pricing model _________.

1. Provides a risk-return trade off in which risk is measured in terms of the market volatility

2. Provides a risk-return trade off in which risk is measured in terms of beta

3. Measures risk as the coefficient of variation between security and market rates of return

4. Depicts the total risk of a security

4.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 _______.

1.Between 10% and 18 %

2. Between 8% and 20%

3. Less than 8%

4. Between 6 % and 14%

5.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?

1.An investor with a required rate of return of 10% will value the bond at more than $ 1,000

2.An investor who buys the bond for $900 and holds the bond until maturity will have a capital loss.

3. An investor who buys the bond for $900 will have a yield to maturity on the bond greater than 9%.

4.If the bond’s market price is $900, then the annual interest payments on the bond will be $ 81.

6.Investment A has...