【文章內(nèi)容簡介】 the past. According to CAPM, the appropriate hurdle rate would beA.4%.B.%.C.15%.D.11%.E.%.38.As a financial analyst, you are tasked with evaluating a capital budgeting project. You were instructed to use the IRR method and you need to determine an appropriate hurdle rate. The riskfree rate is 5% and the expected market rate of return is 10%. Your pany has a beta of and the project that you are evaluating is considered to have risk equal to the average project that the pany has accepted in the past. According to CAPM, the appropriate hurdle rate would beA.10%.B.5%.C.%.D.%.E.%.39.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 10%, you shouldA.buy CAT because it is overpriced.B.sell short CAT because it is overpriced.C.sell short CAT because it is underpriced.D.buy CAT because it is underpriced.E.None of the options, as CAT is fairly priced40.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 11%, you shouldA.buy CAT because it is overpriced.B.sell short CAT because it is overpriced.C.sell short CAT because it is underpriced.D.buy CAT because it is underpriced.E.None of the options, as CAT is fairly priced41.The riskfree rate is 4%. The expected market rate of return is 11%. If you expect CAT with a beta of to offer a rate of return of 13%, you shouldA.buy CAT because it is overpriced.B.sell short CAT because it is overpriced.C.sell short CAT because it is underpriced.D.buy CAT because it is underpriced.E.None of the options, as CAT is fairly priced42.You invest 55% of your money in security A with a beta of and the rest of your money in security B with a beta of . The beta of the resulting portfolio isA..B..C..D..E..43.Given are the following two stocks A and B:If the expected market rate of return is and the riskfree rate is , which security would be considered the better buy and why?A.A because it offers an expected excess return of %.B.B because it offers an expected excess return of %.C.A because it offers an expected excess return of %.D.B because it offers an expected return of 14%.E.B because it has a higher beta.44.Capital asset pricing theory asserts that portfolio returns are best explained byA.economic factors.B.specific risk.C.systematic risk.D.diversification.45.According to the CAPM, the risk premium an investor expects to receive on any stock or portfolio increasesA.directly with alpha.B.inversely with alpha.C.directly with beta.D.inversely with beta.E.in proportion to its standard deviation.46.What is the expected return of a zerobeta security?A.The market rate of return.B.Zero rate of return.C.A negative rate of return.D.The riskfree rate.47.Standard deviation and beta both measure risk, but they are different in that beta measuresA.both systematic and unsystematic risk.B.only systematic risk while standard deviation is a measure of total risk.C.only unsystematic risk while standard deviation is a measure of total risk.D.both systematic and unsystematic risk while standard deviation measures only systematic risk.E.total risk while standard deviation measures only nonsystematic risk.48.The expected returnbeta relationshipA.is the most familiar expression of the CAPM to practitioners.B.refers to the way in which the covariance between the returns on a stock and returns on the market measures the contribution of the stock to the variance of the market portfolio, which is beta.C.assumes that investors hold welldiversified portfolios.D.All of the options are true.E.None of the options is true.49.The security market line (SML)A.can be portrayed graphically as the expected returnbeta relationship.B.can be portrayed graphically as the expected returnstandard deviation of market returns relationship.C.provides a benchmark for evaluation of investment performance.D.can be portrayed graphically as the expected returnbeta relationship and provides a benchmark for evaluation of investment performance.E.can be portrayed graphically as the expected returnstandard deviation of market returns relationship and provides a benchmark for evaluation of investment performance.50.Research by Jeremy Stein of MIT resolves the dispute over whether beta is a sufficient pricing factor by suggesting that managers should use beta to estimateA.longterm returns but not shortterm returns.B.shortterm returns but not longterm returns.C.both long and shortterm returns.D.booktomarket ratios.E.None of the options was suggested by Stein.51.Studies of liquidity spreads in security markets have shown thatA.liquid stocks earn higher returns than illiquid stocks.B.illiquid stocks earn higher returns than liquid stocks.C.both liquid and illiquid stocks earn the same returns.D.illiquid stocks are good investments for frequent, shortterm traders.52.An underpriced security will plotA.on the security market line.B.below the security market line.C.above the security market line.D.either above or below the security market line depending on its covariance with the market.E.either above or below the security market line depending on its standard deviation.53.An overpriced security will plotA.on the security market