$1.$ Mai is considering a stock purchase. The stock pays a constant annual dividend of $$2\mathrm{.}00$ per share and is currently trading at $$19.$ Mai$$s required rate of return for this stock is $10\%.$ Should she buy this stock?

$2.$ You have the following information:

Year X Returns Y Returns Market Returns

$201015\%12\%15\%$

$201118\%7\%10\%$

$2012-17\%-5\%-12\%$

$20134\%2\%3\%$

$201420\%12\%15\%$

The risk$-$free rate is $8\%$ and the market risk premium is $4\%.$

a$.$ Calculate: Coefficients $\backslash$beta X and $\backslash$beta Y

b$.$ Using the results of question $1,$ calculate the required rate of return for stock X and stock Y$.$ The expected rate of return of X:$13\%,$ Y:$14\%.$ Discuss about the value of these stock.

c$.$ Using the results of questions $1$ and $2,$ calculate the required rate of return for a portfolio with a composition of $30\%$ X shares and $70\%$ Y shares.

$3.$ Stock XYZ has an expected return of $12\%,$ and beta $=1.$ Stock ABC has an expected return of $13\%,$ and beta $=1\mathrm{.}5.$ The market's expected return is $11\%$ and rf $=5\%.$ What is the alpha coefficient of each stock? Draw the SML line and the risk$-$return score of each stock on a picture. Draw alpha. Which stocks have high valuations? Low valuation?