Q1) There is a 58.60% probability of an average economy and a 41.40% probability of an above average economy.You invest 32.90% of your money in Stock S and 67.10% of your money in Stock T.In an average economy the expected returns for Stock S and Stock T are 10.30% and 5.10%, respectively.In an above average economy the the expected returns for Stock S and T are 25.80% and 36.10%, respectively.What is the expected return for this two stock portfolio?

Q3) You are invested 28.00% in growth stocks with a beta of 1.85, 39.80% in value stocks with a beta of 1.18, and 32.20% in the market portfolio.What is the beta of your portfolio?

Q4) An analyst gathered the following information for a stock and market parameters: stock beta = 0.91; expected return on the Market = 9.10%; expected return on T-bills = 3.40%; current stock Price = $7.33; expected stock price in one year = $14.96; expected dividend payment next year = $4.10. Calculate the

a) Required return for this stock : b) Expected return for this stock :

Q5) The market risk premium for next period is 9.60% and the risk-free rate is 1.20%. Stock Z has a beta of 0.60 and an expected return of 14.80%. What is the:

a) Market's reward-to-risk ratio? : b) Stock Z's reward-to-risk ratio

Q1) There is a 34.90% probability of a below average economy and a 65.10% probability of an average economy.If there is a below average economy stocks A and B will have returns of 4.90% and 4.50%, respectively.If there is an average economy stocks A and B will have returns of 19.50% and -6.50%, respectively. Compute the:

a) Expected Return for Stock A

b) Expected Return for Stock B

c) Standard Deviation for Stock A

d) Standard Deviation for Stock B