1. Your investment club has only two stocks in its portfolio. $30,000 is invested in a stock with a beta of 0.5, and $45,000 is invested in a stock with a beta of 1.8. What is the portfolio's beta? Do not round intermediate calculations. Round your answer to two decimal places.

2. AA Corporation's stock has a beta of 0.8. The risk-free rate is 3%, and the expected return on the market is 11%. What is the required rate of return on AA's stock? Do not round intermediate calculations. Round your answer to one decimal place.

3. Suppose that the risk-free rate is 4% and that the market risk premium is 6%. Round your answers to one decimal place.

1. What is the required return on the market?

%

2. What is the required return on a stock with a beta of 1.0?

%

3. What is the required return on a stock with a beta of 1.3?.

%

4. An analyst has modeled the stock of a company using the Fama-French three-factor model. The market return is 8%, the return on the SMB portfolio (r_SMB) is 2.4%, and the return on the HML portfolio (r_HML) is 5.0%. If a_i = 0, b_i = 1.2, c_i = -0.4, and d_i = 1.3, what is the stock's predicted return? Do not round intermediate calculations. Round your answer to two decimal places.