1. a) The risk-free rate is 1.8% and the market return is 10.8%. The betaof the stock is 1.09. What is the required return of the stock? Enter you answer as a percentage and rounded to 2 DECIMAL PLACES.
2. b) Using the correct answer from the previous question, if the expected return is19%,is this stock underpriced or overpriced?
3. Consider a stock that has a covariance of returns to the market of 0.0105. The standard deviation of the market is 0.124. What is the betaof this stock? Enter your answer rounded to 2 DECIMAL PLACES.
4. Given a risk-free rate of 2.5%, a market risk premium of 10.9%, and an expected return of 12.5%, what is the beta of this stock? Enter your answer rounded to 2 DECIMAL PLACES.
5. a) The market risk premium is 5.4% and the risk-free rate is 2.6%. The beta of the stock is 0.38. What is the required return of the stock? Enter you answer as a percentage.
6. b) Using the correct answer from the previous question, if the expected return is 12%, is this stock underpriced or overpriced?