1-Problem 10-19 Under-/Overvalued Stock (LG10-3)

A manager believes his firm will earn a return of 19.40 percent next year. His firm has a beta of 1.67, the expected return on the market is 11.20 percent, and the risk-free rate is 3.20 percent.

Compute the return the firm should earn given its level of risk. (Round your answer to 2 decimal places.)

required return =......%

2-Problem 10-22 Portfolio Beta (LG10-3)

You own $20,384 of Human Genome stock that has an assumed beta of 2.51. You also own $12,740 of Frozen Food Express (assumed beta = 2.38) and $3,276 of Molecular Devices (assumed beta = 0.93).

What is the beta of your portfolio? (Round your answer to 2 decimal places.)

portfolio beta=.....%