36.Hulot Corp.has a beta of 1.27.If the risk-free rate is 7.5%and the required return on the market is 14%,what is the required return on Hulot stock? (a)8.23% (b)14.00% (c)15.76% (d)21.5% Answer:(c) 37.Consider a market portfolio that has a standard deviation of 0.25.The average degree of risk aversion is 1.6.If the expected return on the market portfolio is 0.20,what is the equation for the Capital Market Line? (a)Er）=0.10+0.10o (b)Er)=0.10+0.40o (c)Er)=0.13+0.10o (dEr）=0.13+0.40o Answer:(d) 38.According to the CAPM,the risk premium on any asset is equal to (a)its beta (b)its beta times the risk premium on the market portfolio (c)its market risk premium times alpha (d)its market risk premium divided by beta Answer:(b) 39.The market portfolio has a standard deviation of return of 0.22 and the expected return on the market portfolio is 21%.Calculate the market degree of risk aversion if the risk-free rate of return is 10%. (a0.50 (b)1.41 (c)2.27 (d6.40 Answer:(c) 13-1113-11 36. Hulot Corp. has a beta of 1.27. If the risk-free rate is 7.5% and the required return on the market is 14%, what is the required return on Hulot stock? (a) 8.23% (b) 14.00% (c) 15.76% (d) 21.5% Answer: (c) 37. Consider a market portfolio that has a standard deviation of 0.25. The average degree of risk aversion is 1.6. If the expected return on the market portfolio is 0.20, what is the equation for the Capital Market Line? (a) E(r) = 0.10 + 0.10σ (b) E(r) = 0.10 + 0.40 σ (c) E(r) = 0.13 + 0.10σ (d) E(r) = 0.13 + 0.40σ Answer: (d) 38. According to the CAPM, the risk premium on any asset is equal to ________. (a) its beta (b) its beta times the risk premium on the market portfolio (c) its market risk premium times alpha (d) its market risk premium divided by beta Answer: (b) 39. The market portfolio has a standard deviation of return of 0.22 and the expected return on the market portfolio is 21%. Calculate the market degree of risk aversion if the risk-free rate of return is 10%. (a) 0.50 (b) 1.41 (c) 2.27 (d) 6.40 Answer: (c)