Exhibit 92
Use the Information Below for the Following Problem(S)
Consider

question 38

Multiple Choice

Exhibit 9.2
Use the Information Below for the Following Problem(S)
Consider the three stocks, stock X, stock Y and stock Z, that have the following factor loadings (or factor betas) .
$$\begin{array} { c c c } \text { Stack } & \text { Factor 1 Londine } & \text { Factor } 2 \text { Londing } \\\hline X & - [ .55 & 1.2 \\Y & - [ .10 & 0.85 \\Z & 0.35 & 0.5\end{array}$$
The zero-beta return (??) = 3%, and the risk premia are ?? = 10%, ?? = 8%. Assume that all three stocks are currently priced at $50.
-Refer to Exhibit 9.2.The expected prices one year from now for stocks X,Y,and Z are

• A) $53.55, $54.4, $55.25
• B) $45.35, $54.4, $55.25
• C) $55.55, $56.35, $57.15
• D) $50, $50, $50
• E) $51.35, $47.79, $51.58.

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Definitions:

Capacity

The maximum amount that something can contain or produce, often used in the context of production and manufacturing facilities.

Gross Profit

The difference between revenue and the cost of goods sold before accounting for certain other costs.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term liquidity of a business.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the operating cycle of the business, whichever is longer.