A project has a 0.34 chance of doubling your investment in a year and a 0.66 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

Expected return = 0.34 * 1 + 0.66*(-0.5) = 0.01 = 1%

Chapter 7 (CAPM equations)

5. Here are data on two companies. The T-bill rate is 5.2% and the market risk premium is 8.0%.

Hint: Use the equation:

E(r) = r_f + [E(r_M) r_f]

And risk free rate: r_f = 5.2%