1. The return on shares of Valley Transporter is predicted under the following various economic conditions: Recession -0.13 Normal +0.09 Boom +0.20 If each economy state has the same probability of occurring, what is the variance of the stock? Place your answer in decimal form using four decimal places

2. The return on shares of the Orange Company are predicted under the following states of nature. The states of nature are all equally likely, and because there are a total of three states, each state has a 33.333% chance of occurring. Recession -0.11 Normal +0.08 Boom +0.23 What is the standard deviation of Orange? * Place your answer in decimal form, for example as say .0675 and not 6.75.

3. Toyota Corp.'s stock is $28 per share. Its expected return is 23% and variance is 15%. Honda Corp.'s stock is $20 per share. Its expected return is 16% and variance is 6%. Benz Corp.'s stock is $50 per share. Its expected return is 14% and variance 7%. What would be the expected return of a portfolio consisting of 50% Toyota and 50% Honda? % * Place your answer in percentage form, say 5.99% and not .0599

4. Toyota has an expected return of 24%, and a variance of 0.013. Honda has an expected return of 18%, and a variance of 0.008. The covariance between Toyota and Honda is 0.06. Using these data, calculate the variance of a portfolio consisting of 50% Toyota and 50% Honda.

5. The return on the Rush Corporation in the state of recession is estimated to be -22% and the return on Rush in the state of boom is estimated to be 34%. The return on the Oberman Corporation in the state of recession is estimated to be 41% and the return on Oberman in the state of boom is estimated to be -15%. Given this information, what is the covariance between Rush and Oberman if there is a 0.40 probability that the economy will be in the state of boom and a 0.60 probability that the economy will be in the state of recession.

Place your answer in decimal form and not as a percentage.

6. Toyota Corp.'s stock price has a variance of returns of 0.0315. Honda Corp.'s stock has a variance of returns of 0.0495. The covariance between Toyota and Honda is 0.0295. What is the correlation coefficient between Toyota and Honda?

*Use at least four decimal places in your answer. 7. Toyota Corp.'s stock price has a variance of returns equal to 0.0295. Honda Corp.'s stock price has a variance of returns equal to 0.0475. The covariance between Toyota and Honda is 0.0525. What is the standard deviation of a portfolio consisting of 50% Toyota and 50% Honda? *Place your answer in decimal form 8. Financial analysts have estimated the returns on shares of Drucker Corporation and the overall market portfolio under various economic conditions as follows. The return for Drucker in the following three economic states of nature are forecasted to be: -18% in recession, +12% in moderate growth, and +28% in a boom. Estimates for the market as a whole in the same economic states are -9% in recession, +9% in moderate growth, and +21% in boom. The analyst considers each state to be equally likely. Using these data, compute the beta of Drucker Corporation's stock. Place your answer as a number with at least three decimal places. 9. If the expected return on the market portfolio is estimated to be 19%, the risk-free rate of interest is 5%, and the beta of asset i is 0.50, what is the expected return on asset i using CAPM model?

% Place your answer as a PERCENT using two decimal places and no percentage sign. For example, if your answer is seven point five two percent, type 7.52.