1.) Toyota Corp's stock is $30 per share. Its expected return is 22% and variance is 14%. Honda Corp's stock is $22 per share. Its expected return is 19% and variance is 5%. Benz Corp's stock is $48 per share. Its expected return is 11% and variance 5%. The covariance between Toyota and Honda is 0.08. What would be the standard deviation of a portfolio consisting of 50% Toyota and 50% Honda?

2.) The return on the Rush Corporation in the state of recession is estimated to be -25% and the return on Rush in the state of boom is estimated to be 35%. The return on the Oberman Corporation in the state of recession is estimated to be 40% and the return on Oberman in the state of boom is estimated to be -16%. Given this information, what is the covariance between Rush and Oberman if there is a 0.70 probability that the economy will be in the state of boom and a 0.30 probability that the economy will be in the state of recession.

3.) 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: -20% in recession, +8% in moderate growth, and +30% in a boom. Estimates for the market as a whole in the same economic states are -9% in recession, +8% in moderate growth, and +21% in boom. The analyst considers each state to be equally likely. What is the expected return for Drucker Corporation? % What is the expected return of the market? %

4.) 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, +9% in moderate growth, and +35% in a boom. Estimates for the market as a whole in the same economic states are -9% in recession, +10% in moderate growth, and +20% in boom. The analyst considers each state to be equally likely. Using these data, compute the beta of Drucker Corporation's stock.

5.) Both Oliver Food Corporation and Sara Food Corporation have debt with a beta of 0.5 and equity of a beta of 1.5.What is the beta of Oliver Food Corporation's asset if the corporation's debt is 45% of its securities and the equity is 55% of its securities?

6.) Financial analysts have estimated the returns on shares of the Goldday Corporation and the overall market portfolio under two economic states nature as follows. For Goldday the state dependent returns are -0.06 in recession, and 0.06 in an economic boom. For the market the state dependent returns are -0.06 in recession,and 0.16 in boom. The analyst consider each state to be equally likely. Compute the correlation coefficient between Goldday and the Market.