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2. If a stock has a beta coefficient, equal to 1.20, the risk premium associated with the market is 9%, and the risk-free rate
2. If a stock has a beta coefficient, equal to 1.20, the risk premium associated with the market is 9%, and the risk-free rate is 5%. Then what should be the appropriate return for this stock? (Write down the formulas that you use and show your calculations clearly). 3. An investor wants to calculate the expected return and standard deviation experience by his investment portfolio in the last three months. The historical returns are as follows: October-2022: 35% November-2022: 19% December-2022: 22% Assume that the probability of the first one to happen is 60% while the other two has equal probabilities to happen. Calculate the expected return and standard deviation (risk). (Write down the formulas you that you use and show your calculations clearly).
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