1. If you formed a portfolio that consisted of 50 percent of Bartman stock and 50 percent of

   Reynolds stock, what would be its beta and its required return?

Bartman Industries' and Reynolds Incorporated's stock prices and dividends, along with the Wilshire 5000 Index, are shown below for the period 1996-2001. The Wilshire 5000 data are adjusted to include dividends. Year 2001 2000 1999 1998 1997 1996 Bartman Industries Stock Price Dividend $ 17.250 1.15 14.750 1.06 16.500 1.00 10.750 0.95 11.375 0.90 7.625 0.85 Reynolds Incorporated Stock Price Dividend $ 48.750 3.00 52.300 2.90 48.750 2.75 57.250 60.000 2.25 55.750 2.00 Wilshire 5000 Includes Divs. 11,663.98 8,785.70 8,679.98 6,434.03 5,602.28 4,705.97 2.50