1. The returns on the common stock of New Image Products are quite cyclical. In a boom economy, the stock is expected to return 24 percent in comparison to 14 percent in a normal economy and a negative 16 percent in a recessionary period. The probability of a recession is 15 percent while the probability of a boom is 25 percent. What is the standard deviation of the returns on this stock? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

2. The market has an expected rate of return of 12.4 percent. The long-term government bond is expected to yield 4.8 percent and the U.S. Treasury bill is expected to yield 1.1 percent. The inflation rate is 3.2 percent. What is the market risk premium? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

3. The risk-free rate of return is 2.6 percent, the inflation rate is 3.1 percent, and the market risk premium is 4.6 percent. What is the expected rate of return on a stock with a beta of 0.69? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

4. Suppose the common stock of United Industries has a beta of 1.19 and an expected return of 11.8 percent. The risk-free rate of return is 3.5 percent while the inflation rate is 2.6 percent. What is the expected market risk premium? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

5. Your portfolio is comprised of 30 percent of Stock X, 20 percent of Stock Y, and 50 percent of Stock Z. Stock X has a beta of 1.12, Stock Y has a beta of 0.87, and Stock Z has a beta of 1.35. What is the beta of your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)