1.

Suppose that the Treasury bill rate is 6% and the expected return on the market stays at 9%.Use the following information.

Stock	Beta ()
Caterpillar	1.66
Dow Chemical	1.65
Ford	1.44
Microsoft	0.98
Apple	0.91
Johnson & Johnson	0.53
Walmart	0.45
Campbell Soup	0.39
Consolidated Edison	0.17
Newmont	0.00

a.Calculate the expected return from Johnson & Johnson.(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Expected return %

b.Find the highest expected return that is offered by one of these stocks.(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

Highest expected return %

c.Find the lowest expected return that is offered by one of these stocks.(Do not round intermediate calculations. Enter your answer as a percent rounded to the nearest whole number.)

Lowest expected return %

2.

The following table shows the sensitivity of four stocks to the three FamaFrench factors. Assume the interest rate is 2%, the expected risk premium on the market is 7%, the expected risk premium on the size factor is 3.5%, and the expected risk premium on the book-to-market factor is 4.8%.

	Boeing	Campbell Soup	Dow Chemical	Apple
Market	1.13	.51	1.51	1.08
Size	.49	.60	.28	.57
Book-to-market	.05	.25	.13	.074

Calculate the expected return on each stock.(Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

	Expected Return
Boeing	%
Campbell Soup	%
Dow Chemical	%
Apple