QUESTION 1

Stock Y has a beta of 0.9 and an expected return of 13.57 percent. Stock Z has a beta of 0.60 and an expected return of 7 percent. If the risk-free rate is 4.0 percent and the market risk premium is 9.2 percent, what is the reward-to-risk ratio of Y? (Enter the answer to this question below. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Also, are the stocks correctly priced? (you won't be able to enter the answer to this question, but think about it)

QUESTION 2

You own 500 shares of Stock A at a price of $65 per share, 597 shares of Stock B at $82 per share, and 550 shares of Stock C at $34 per sharer. The betas for the stocks are 1.5, 1.3, and 0.6, respectively. What is the beta of your portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)