Suppose you have the following data from company X for states of nature:

Also, consider that the risk-free rate is 6%. Calculate the following: Expected market return () Variance of market return () Expected return of the company () Covariance between market performance and company performance. Write the equation of the Stock Market Line (SML). What is the required return for the company?

Probability Market Rates I'm .1 -.15 Company Rates, ri -.30 .00 .20 .3 4 .2 .05 .15 .20 .50