A stock has a beta of 1.2, the expected return on the market is 11.4 percent, and the risk-free rate is 4.75 percent.

Required: What must the expected return on this stock be?

A stock has an expected return of 12 percent and a beta of 1.16, and the expected return on the market is 11 percent.

Required: What must the risk-free rate be?

Stock J has a beta of 1.2 and an expected return of 13.16 percent, while Stock K has a beta of 0.75 and an expected return of 10.1 percent.

You want a portfolio with the same risk as the market.

Requirement 1: What is the portfolio weight of each stock?

Stock J.....

Stock K.....

Requirement 2: What is the expected return of your portfolio?

You have a portfolio with the following:

Stock Number of Shares Price Expected Return

W 725 $ 46 13%

X 625 23 17

Y 375 59 15

Z 600 44 16

Required: What is the expected return of your portfolio?