State	Probability of Outcome	Return on Security 1	Return on Security 2	Return on Security 3
1	.15	.20	.20	.05
2	.35	.15	.10	.10
3	.35	.10	.15	.15
4	.15	.05	.05	.20

e-2.	What is the standard deviation of a portfolio with half of its funds invested in Security 2 and half in Security 3? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

1. A stock has an expected return of 10.4 percent, the risk-free rate is 3.8 percent, and the market risk premium is 7 percent. What must the beta of this stock be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

2. A stock has an expected return of 12.7 percent, its beta is 1.20, and the risk-free rate is 4.2 percent. What must the expected return on the market be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

3. Suppose the risk-free rate is 4.4 percent and the market portfolio has an expected return of 10.9 percent. The market portfolio has a variance of .0391. Portfolio Z has a correlation coefficient with the market of .31 and a variance of .3407. Find the expected return of the portfolio Z.