FIN 370 Course Great Wisdom / tutorialrank.com FIN 370 Course Great Wisdom / tutorialrank.com | Page 26

Which one of the following should earn the most risk premium based on CAPM ?

Diversified portfolio with returns similar to the overall market .

Stock with a beta of 1.38 .

Portfolio with a beta of 1.01 .

U . S . Treasury bill .

Stock with a beta of 0.74 .

Which one of these actions will increase the operating cycle ? Assume all else held constant .

Decreasing the receivables turnover rate .

Decreasing the payables period .