Investment performance adjusted for systematic risk

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Reference no: EM132069572

1. The risk-free rate is 6%, and the expected market return is 15%.A stock with a beta of 1.2 is selling for $25 and will pay a $1 dividend at the end of the year. If the stock is priced at $30 at year-end, it is:

a. under-priced, so buy it

b. over-priced,so buy it

c. under-priced, so short it

d. over-priced,so short it

2. A manager who evaluates portfolios' investment performance adjusted for systematic risk is most likely to rank portfolio based on their

a. Correlation Coefficient

b. Sharpe's ratios

c. Treynor mearsures

d. R-squared

Reference no: EM132069572

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