1. Assuming that the risk (standard deviation) of the market is 25%, calculate beta () for the new issue of stock with a standard deviation of 40% and a correlation with the market of 0.7.

2. Suppose the risk-free rate is 3%, the expected return on the market portfolio is 13%, and its standard deviation is 23%. A German company, Mueller Metals, has a standard deviation of 50% and a correlation of 0.65 with the market. Calculate Mueller metals beta and expected return.