Exhibit 93
Use the Information Below for the Following Problem(S)
Stocks

question 29

Multiple Choice

Exhibit 9.3
Use the Information Below for the Following Problem(S)
Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (??) = .025 and the risk premiums for the two factors are (??) = .12 and (??) = .10.
$$\begin{array} { c c c } \text { Stack } & \text { Factor } 1 w _ { i 1 } & \text { Factor } 2 w _ { i 2 } \\\hline \mathrm { A } & - 0.25 & 1.1 \\\mathrm {~B} & - 0.05 & 0.9 \\\mathrm { C } & 0.01 & 0.6\end{array}$$
-Refer to Exhibit 9.3.Assume that stocks A,B,and C never pay dividends and stocks A,B,and C are currently trading at $10,$20,and $30,respectively.What is the expected price next year for each stock?
     A     B     C

• A) $10.82  $21.82  $30.99
• B) $11.05  $22.18  $30.96
• C) $11.32  $22.56  $30.99
• D) $11.65  $22.42  $30.96
• E) $18.50  $37.00  $48.30

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Definitions:

Truth Table

A computational tool in logic, designed as a table, which assesses the values of logical expressions on their respective functional arguments.

Atomic Sentences

Simple sentences that contain no logical connectors or quantifiers and state a fact about a single entity or a relationship between entities.

Truth Values

In logic, the attribution of truth or falsity to a proposition, typically represented as true (T) or false (F).

Truth Table

A logical table used to determine the validity of a proposition by listing all possible scenarios and their outcomes.