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.