10. Portfolio Expected Return You have $10,000 to invest in a stock portfolio. Your choices are Stock X with an expected return of 13 percent and Stock Y with an expected return of 8.5 percent. If your goal is to create a portfolio with an expected return of 11.9 percent, how much money will you invest in Stock X ? In Stock Y ?

11. Calculating Returns and Standard Deviations Based on the following information, calculate the expected return and standard deviation for the two stocks: State of Economy Probability of State Stock A Returns Stock B Returns Recession 0.30 0.06 -0.20 Steady 0.55 0.07 0.13 Boom 0.15 0.11 0.33

12. Calculating Portfolio Betas You own a stock portfolio invested 15 percent in Stock Q, 35 percent in Stock R, 30 percent in Stock S, and 20 percent in Stock T. The betas for these four stocks are .75, 1.90, 1.38, and 1.16, respectively. What is the portfolio beta?