Question
1 - Suppose you are investing in only 2 stocks with a total value of $100,000. $37,500 is invested in Stock A with a beta
1 - Suppose you are investing in only 2 stocks with a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.25. What is your portfolio's beta to the nearest hundredth?
2 - ABC's stock has a beta of 1.60, the risk-free rate is 4.25%, and the expected return on the market portfolio is 8.00%. What is the expected return on ABC's stock?
3 - If a stock has a beta of 1.5 and the market portfolio has an expected return of 9% when the risk-free rate is 5%, what is the risk premium of the stock?
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