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Finance workQuiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 2 (1 point)Given the returns and probabilities for the three possible states listed here, calculate the covariance between the returns of Stock A and Stock B. For convenience, assume that the expected returns of Stock A and Stock B are 0.11 and 0.18, respectively. (Round your answer to 4 decimal places. For example .1244)ProbabilityReturn(A)Return(B)Good0.350.300.50OK0.500.100.10Poor0.15-0.25-0.30Quiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 3 (1 point)In order to fund her retirement, Michele requires a portfolio with an expected return of 0.10 per year over the next 30 years. She has decided to invest in Stocks 1, 2, and 3, with 25 percent in Stock 1, 50 percent in Stock 2, and 25 percent in Stock 3. If Stocks 1 and 2 have expected returns of 0.09 and 0.08 per year, respectively, then what is the minimum expected annual return for Stock 3 that will enable Michele to achieve her investment requirement?Quiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 5 (1 point)Lee purchased a stock one year ago for $25. The stock is now worth $34, and the total return to Lee for owning the stock was 0.35. What is the dollar amount of dividends that he received for owning the stock during the year?Your Answer:Quiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 6 (1 point)The beta of M Simon Inc., stock is 1.3, whereas the risk-free rate of return is 0.10. If the expected return on the market is 0.13, then what is the expected return on M Simon Inc?Your Answer:Quiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 7 (1 point)London purchased a piece of real estate last year for $82,400. The real estate is now worth $102,000. If London needs to have a total return of 0.24 during the year, then what is the dollar amount of income that she needed to have to reach her objective?Your Answer:Quiz – MGMT 640 E281 Financial Decision Making for Managers (2162) – UMUC Learning Management SystemQuestion 8 (1 point)The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.07. If the beta of RKP, Inc., stock is 1.8, then what is the expected return on RKP?Your Answer:
