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Can you help me with the following questions, from CHAPTER 13 RETURN, RISK, AND THE SECURITY MARKET LINE? fQuestion 2 A portfolio consists of 50%

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Can you help me with the following questions, from CHAPTER 13 RETURN, RISK, AND THE SECURITY MARKET LINE?

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\fQuestion 2 A portfolio consists of 50% invested in Stock X and 50% invested in Stock Y. We expect two probable states to occur in the future: boom or Not\": answered normal. The probability of each state and the return of each stock in each state are presented in the table below. 1136\"\" out Of State Probability of state Return on Stock 1!: Return on Stock Y '7 \"'33 \"\"25\"\" ' Boom 309a 2596 3596 l ' Normal ?0% 10% 5% ' What are the expected portfolio return and standard deviation? Select one: Q a. 14.25%; 10.53% 0 b. 14.25%; 10.31% Cl C. 133596; 11.25% 0 d. 14.25%; 6.68% CI e. 133595; 12.12% Quanlon 3 Given 'le following infon'naon on a portfolio of Stock X and Stock Y, what is the portfolio standard deviation? "\"3\"" \"were\" Probability of boom state = 3096 ask\" M f probability of normal state = ml. Expected return on X = 14.5% I? \"BE questlon Expected return on Y = 1496 Variance on X = 0.004725 Variance on Y = 0.0189 Portfolio weight on X = 50% Portfolio weight on Y = 50% Correlation between X and 'l' = 1 Select one: C- a. 3.44% (3 b. 10.31% :3 c.1.139i: (3n d.12.86% (3- 9.5.5395 Question 10 Not yet answered Marked out of 1.00 '1 Flag questlen Radagast Inc. has 1 million common shares outstanding with each share priced at $12. The company's equity beta is 2. What is the expected return on the company's shares if the riskfree rate is 5% and the market risk premium is 8%? Select one: C- a. 5% (3n b.1396 -:3- c.1396 (3n d.2'l|ib :3- e. 31% Quutlon 4 Not yet answered Marked out of 1.00 '1 Flag question StockA has a beta of1.2 and a standard deviation of 25% on its returns. Stock B has a beta 0171.5 and a standard deviation of 20% on its returns. Which stock has the higher syste mac risk, and which one has the higher unsystematio risk? Select one: C: a. A; A O b.A; B Cl C. B:A Q d. B; B C; e. B: insufcient infonnaon for comparison of unsystemac risks Question 6 Stock A has an expected return of12'l, a standard deviation of 24% on its returns, and a beta of1.2. Stock B has an expected return of 1 5%, "Myer answered a standard deviation of 30% on its returns, and a beta of 1 .5. The correlation between the two stocks is 0.8. If we invested $100,000 in Stock Marked out of hand $200,000 in Stock 3. what is the beta of our portfolio? 1.00 I? Flag queson Select one: CI a. 1.0 O b. 1.2 O c. 1.4 Q d. 1.5 CI 9. 1.6 d Question 7 We have the following information on Stocks A and B. The ris kfree rate is 5%, and the market risk premium is 6.2596. Assume that the Not,\" answered market portfolio is correctly priced. Based on the reward-torisk ratio. are Stocks A and B overpriced. underpriced. or correctly priced? washed out of | Stock A Stock B ' " \"33 "\"95\"\" Expected return 10% 1596 ' Beta {1.3 1-5 Select one: CI a. A is underpriced; B is overpriced. O b. A is correctly priced; B is overpriced. O c. A is overpriced; B is underpriced. Q d. A is correctly priced: B is underpriced. ("j e. Both stocks are Icorreirylr priced

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