John has a utility function given by the expression U(x)= E(r) - 0.5A(s^2). Where E(r) is the expected return on an asset and s is the standard deviation of returns on that asset.

John has the opportunity to purchase the XJK security that returns 25.9% with 23% probability and returns 8.6% the remainder of the time. The security has a price of $33.00 and A=11.

A) What is the risk neutral valuation of the XJK security (Expected Value)

B) Using the utility function above, find Johns risk averse valuation of XJK security. Hint; find Johns certainty equivalence (CEQ) for this security's payoff

C) If the expected annual return on the market is 6.575%, the standard deviation of the market return is 8.9% and the risk free rate for the next year is 1.22% then what is John's optimal percent of funds that he'll invest in the market?

D) Use the rates given in part C to answer this question. If a stock had a Beta of 2.92 what would be the expected return for that stock in the coming year?