the attach below are multiple and short answer questions ,total 10 please help me to solve it ATTACHMENT PREVIEW Download attachment quiz5.docx 1. You are considering creating a financial portfolio comprising two stocks which have a correlation of 1 Choose one answer. A. The portfolio will have a risk level somewhere between the risk of the stock with the lowest risk and the risk of the stock with the highest risk. B. The portfolio will have a higher risk than the stock with the highest risk. C. The portfolio will have a lower risk than the stock with the lowest risk. D. The portfolio will have zero risk as it is a diversified portfolio. 2 You hold two investments in your share portfolio. You hold shares in Oil Ltd currently worth $1,500 as well as shares in Paint Ltd currently worth $3,400. The expected return of Oil Ltd is 12% per annum, and of Paint Ltd is 8% per annum. Estimate the expected return on your portfolio. Answer: Number 3 Investa Ltd has generated annual holding period returns over the past four years of 12%, -8%, 5%, 7%. Based on this historical performance, estimate the expected return of Investa Ltd. Answer: 4 Investa Ltd has generated annual holding period returns over the past four years of 12%, -8%, 5%, 7%. Based on the historical volatility of its performance, estimate the risk of Investa Ltd. Answer: Number 5 A holding period return is: Choose one answer. A. A gain or a loss on an investment over a given period of time. B. A profit. C. A gain on an investment over a given period of time. D. A profit or a loss. 6 Eagle Ltd has an expected return of 8% and a historical risk of 5%, as compared with the market’s expected return of 18% and historical risk of 9%. The correlation of Eagle Ltd’s return with the market return is 0.6. Calculate the beta of Eagle Ltd. Answer: 7 One year ago you acquired 1,000 shares in Investa Ltd at a price of $12.80 per share. During the past year, you have received two dividend payments for $0.20 and $0.25 per share, respectively. Investa Ltd is currently trading at $15.00. If you sold your shares at the current price, what would be your holding period return? Answer: Number 8 Market risk is: Choose one answer. A. Non-systematic risk. B. The risk of an individual stock. C. The risk component that cannot be diversified away by holding more than one security in a portfolio. D. Diversifiable risk. 9 Nimby Ltd has a beta of 1.3. The yield on a 10-year government bond is 5.6%. The average return on the market is 11% per annum. Estimate the expected return for Nimby Ltd. Answer: 10 The required return is equal to the risk-free return less a risk premium. Answer: true or false