QUESTION 1 A stock with a beta of 0.8 is risky than the market and will when the market changes. Less; overreact Less; underreact More; overreact More; underreact QUESTION 2 Currently the S&P is returning 9% while Treasury bonds are returning 4%. If a stock has a beta of 0.7 and an expected return of 5%, what is the required return for this stock? QUESTION 3 Assume the following states of the world could exist in the economy tomorrow. Find the expected return for this stock. Probability Return 30% -2 50% 3 10 Xxx