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Expected Return Beta Stock A 1 0 . 5 0 % 1 . 2 Stock B 1 3 0 . 9 8 Stock C 1

Expected Return Beta Stock A 10.50%1.2 Stock B 130.98 Stock C 15.71.37 Market 14.21.00 a. Write the market model equation for each stock? b.Assume a portfolio has weights of 30 percent Stock A,45 percent Stock B, and 25 percent Stock C? c. Suppose the return on the market is 15 percent and there are no unsystematic surprises in the returns. What is the return on each stock? What is return on portfolio?

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