1) Quantitative Problem: You are given the following probability distribution for CHC Enterprises:

State of Economy	Probability	Rate of return
Strong	0.15	20%
Normal	0.5	8%
Weak	0.35	-5%

A) What is the stock's expected return? Round your answer to 2 decimal places. Do not round intermediate calculations. %________

B) What is the stock's standard deviation? Round your answer to two decimal places. Do not round intermediate calculations. %__________

C) What is the stock's coefficient of variation? Round your answer to two decimal places. Do not round intermediate calculations.

________

2) Quantitative Problem: You are holding a portfolio with the following investments and betas:

Stock	Dollar investment	Beta
A	$250,000	1.25
B	100,000	1.7
C	400,000	0.7
D	250,000	-0.35
Total investment	$1,000,000

The market's required return is 11% and the risk-free rate is 4%. What is the portfolio's required return? Round your answer to 3 decimal places. Do not round intermediate calculations. %_________

3) Quantitative Problem: You are given the following information for Wine and Cork Enterprises (WCE):

rRF = 2%; rM = 10%; RPM = 8%, and beta = 1.1

A) What is WCE's required rate of return? Round your answer to 2 decimal places. Do not round intermediate calculations. %__________

B) If inflation increases by 2% but there is no change in investors' risk aversion, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %__________

C) Assume now that there is no change in inflation, but risk aversion increases by 1%. What is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %__________

D) If inflation increases by 2% and risk aversion increases by 1%, what is WCE's required rate of return now? Round your answer to two decimal places. Do not round intermediate calculations. %__________