7.4 Chapter 7 HW - Problem Mastery 1) Tommy wishes to determine the return on two stocks she owned in 2019. At the beginning of the year, stock X traded for $80per share. During the year, X paid dividends of $8 At the end of the year, Xstock was worth $62 Calculate the annual rate of return, r, for X (Enter the answer in % format without % sign -> 20.51 and not 20.51% or 0.2051) 3) Calculate the standard deviation of this scenario Outcome 1: Recession. Probability = 40%. Return = 7.38%. Outcome 1: Recovery. Probability = 60%. Return = 17.27%. Answer in % terms w/o % sign and to 4 decimal places (1.2345)

11) Your stock has a = 1.73, the expected return on the stock market is 17.3%, and the yield on T-bills is 4%. What is the expected return on your stock?