1) Your portfolio has a beta of 1.16. The portfolio consists of 50 percent U.S. Treasury bills, 20 percent stock A, and 30 percent stock B. Stock A has a risk-level equivalent to that of the overall market. What is the beta of stock B?

B= _____

2) What is the beta of the following portfolio?

'

p = ____

3) Jerilu Markets has a beta of 1.13. The risk-free rate of return is 2.85 percent and the market rate of return is 9.6 percent. What is the risk premium on this stock? [Note: a stock's total return is equal to the stock risk premium plus the risk-free rate. The stock's risk premium is the market risk premium adjusted for the stock's exposure to market risk].

Stock risk premium = _____ %

4) The risk-free rate of return is 3.7 percent and the market risk premium is 6.6 percent. What is the expected rate of return on a stock with a beta of 1.27?

E(R) = ____ %

What is the expected return of a stock with a beta of 2.15?

E(R) = _____ %

What is the expected return of a stock with a beta of 0.55?

E(R) = _____%

Stock Value Beta J $21,800 1.46 $12,200 1.15 L $46,400 0.95 M $19,400 1.14