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equations please Below Points as marked (10 Points Total) Q1) There is a 12.50% probability of a below average economy and a 87.50% probability of

image text in transcribedequations please

Below Points as marked (10 Points Total) Q1) There is a 12.50% probability of a below average economy and a 87.50% probability of an average economy. If there is a below average economy stocks A and B will have returns of -8.70% and 8.40%, respectively. If there is an average economy stocks A and B will have returns of 13.40% and -10.00%, respectively. Compute the: a) Expected Return for Stock A (0.75 points) b) Expected Return for Stock B (0.75 points) c) Standard Deviation for Stock A (0.75 points) d) Standard Deviation for Stock B (0.75 points): Q2) There is a 58.20% probability of an average economy and a 41.80% probability of an above average economy. You invest 39.50% of your money in Stock S and 60.50% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 9.40% and 9.30%, respectively. In an above average economy the the expected returns for Stock S and T are 18.10% and 13.70%, respectively. What is the expected return for this two stock portfolio? (2 points) Q3) You are invested 12.40% in growth stocks with beta of 1.95, 35.70% in value stocks with a beta of 1.06, and 51.90% in the market portfolio. What is the beta of your portfolio? (1 point) For the final answers, round your answer to the nearest 4 decimal places (3 decimals for the reward-to-risk ratio and 2 for the beta-coefficient). If you need to use a calculated number for further calculations, DO NOT round until after all calculations have been completed Q4) An analyst gathered the following information for a stock and market parameters: stock beta = 1.05; expected on Market = 10.90%, expected return on T-bills = 3.70%; current stock Price = $8.09; expected stock price in one year = $10.83; expected dividend payment next year = $1.16. Calculate the a) Required return for this stock (1 point): b) Expected return for this stock (1 point): Q5) The market risk premium for next period is 7.50% and the risk-free rate is 3.60%. Stock Z has a beta of 1.04 and an expected return of 11.40%. What is the: a) Market's reward-to-risk ratio? (1 point): b) Stock 7 reward.to rick ratin 11 point

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