Q1.Assume the expected return on the market is 18 percent and the risk-free rate is 4 percent.

A.What is the expected return for a stock with a beta equal to 2.00? (Round answers to 2 decimal places, e.g. 15.25.)

B.What is the market risk premium? (Round answers to 2 decimal places, e.g. 15.25.)

Q2.Jason knows that the beta of his portfolio is equal to 1, but he does not know the risk-free rate of return or the market risk premium. He also knows that the expected return on the market is 10.00 percent. What is the expected return on Jason's portfolio? (Round answer to 2 decimal places, e.g. 12.25)

Q3.In February 2017 the risk-free rate was 4.83 percent, the market risk premium was 8 percent, and the beta for Twitter stock was 1.60. What is the expected return that was consistent with the systematic risk associated with the returns on Twitter stock? (Round answer to 2 decimal places, e.g. 17.54%.)

Q4.During the period from 2011 through 2015 the annual returns on small U.S. stocks were -3.20 percent, 18.10 percent, 45.00 percent, 2.90 percent, and -3.20 percent, respectively.

a.What would a $1 investment made at the beginning of 2011 be worth at the end of 2015? (Round answer to 3 decimal places, e.g. 52.750.)

b.What average annual return would have been earned on this investment? (Round answer to 2 decimal places, e.g. 52.75.)