son 5 Let the risk-free rate be 4%. Consider a financial market M. Suppose the economy has two scenarios: boom or bust. The returns in each scenario for the market portfolio M and a stock A that is traded in M are given in the following table: out of Rates of return and states stion Scenario Stock A Market Portfolio M Boom -10% Bust 32% 38% If each scenario is equally likely, answer the following questions: (1) List, in general from what you have leared in this course, 4 ways to compute the expected rate of return on a stock. (Hint: No need for computations or elaborations here). (2) From your answer in part (1), find the expected rate of return on stock A in two different ways. A B I P& ! $ X, X Til 11 son 5 Let the risk-free rate be 4%. Consider a financial market M. Suppose the economy has two scenarios: boom or bust. The returns in each scenario for the market portfolio M and a stock A that is traded in M are given in the following table: out of Rates of return and states stion Scenario Stock A Market Portfolio M Boom -10% Bust 32% 38% If each scenario is equally likely, answer the following questions: (1) List, in general from what you have leared in this course, 4 ways to compute the expected rate of return on a stock. (Hint: No need for computations or elaborations here). (2) From your answer in part (1), find the expected rate of return on stock A in two different ways. A B I P& ! $ X, X Til 11