23 The returns of your portfolio over the last five years were as follows: +10%, +15%, -15%, +5%, +12%. What was the average realized annual return on your portfolio over this time? (answer in %, to two decimal places, i.e. xx.xx) 24 10% Compute the expected return given these five economic states. (answer in %, to two decimal places, i.e. xx.xx) State Probability Return Raging Bull Market 25% Mild Bull Market 15% 15% Neutral Market 40% 5% Mild Bear Market 15% -10% Deep Bear Market 10% -20% 25 Espresso Patronum stock has a beta of 0.85. If the market return is expected to be 12% and the risk-free rate is 3%, what is the expected (required) return on Espresso Patronum. (answer in %, to two decimal places, i.e. XX.xx) 26 You're considering an investment in Amazon stock, which analysts on average expect to be up 10% on the year. The risk- free rate today is 2.50%, Amazon has a Beta of 1.75, and you expect the overall stock market to be up 8% on the year. 26A: Based AMZN's Beta, what is the expected (required) return? 26B: Based on the analysts' forecast, does AMZN seem like a good return for the risk? In other words, is the stock expected to be up more than the Required Return? TRUE = good investment FALSE = bad investment