6. Problem (2 parts) You want to combine 3 stocks to lower risk. The details of your portfolio are as follows. The beta of each stock is 1.07 for Stock X, 1.18 for Stock Y, and .89 for Stock Z. The expected returns on these three stocks are Stock X 10%, Stock Y 13%, and Stock Z 15%. The amount invested in each stock is 19% in Stock X, 34% in Stock Y, and 47% in Stock Z. What is the expected return on the portfolio? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 12.34.) Expected return % What formula did you use to calculate this return? (Write the number from your formula sheet that you used in this calculation) Formula number CFFA = OCF-NCS - ANWC OCF = EBIT+D-T OCF = Profit (1-T)+(D)(T) Formula Sheet NSCFSV - (SV - BV)(T) BV Dstraight-line Years 6 Sensitivity Variable Avariable Sensitivity _ Variable NOCE Avariable 10 NPV = CF 0 (1+R) CF (1 + IRR) IRR - Rate Los (NPV, Vow Rate High Rate_ow) (NPV-NPV. Low 13 PO" DO Po" (R-0) Dividend Yield: 17 18 DPR EPS, 19 EPS Earnings (Revenue - Cost) shares outstanding Price/share 16 PE Earnings as. Price/share Sales 5/5 shares outstanding Sales D 20 EPS4* OPRE Price - Benchmark PE ratio x EPS 21 Pricey Benchmark P-S rato x Sales Share 22 25 27 23 PVA-MT (1+r) Pvp (PMT PVADEPMT 26 FVADEPMT PV 24 VA-PMY +r)" PMT 28 29 Current Yield 31 Annual Coupon Price (PO) 30 PBond F (1YTM YTM (1.YTM (1+R) - (1+r)(1+h) FV-PV(1+r)' PV - FV 33 (1+r) t-in (1) 35 34