There is a37.05%probability of an average economy and a62.95%probability of an above average economy.You invest44.90%of your money in Stock S and55.10%of your money in Stock T.In an average economy the expected returns for Stock S and Stock T are10.31%and8.29% , respectively.In an above average economy the the expected returns for Stock S and T are39.65%and17.35% , respectively.What is the expected return for this two stock portfolio?

You are invested20.22%in growth stocks with a beta of1.727 ,20.15%in value stocks with a beta of0.604 , and59.63%in the market portfolio.What is the beta of your portfolio?

An analyst gathered the following information for a stock and market parameters: stock beta =0.809 ; expected return on the Market =12.48% ; expected return on T-bills =3.57% ; current stock Price =$8.78 ; expected stock price in one year =$11.60 ; expected dividend payment next year =$1.24 . Calculate the required return and expected return for this stock.

a) Required Return :

b) Expected Return :

The market risk premium for next period is5.44%and the risk-free rate is1.84% .Stock Z has a beta of1.259and an expected return of9.54%. Compute the following:

a) Market's reward-to-risk ratio :

b) Stock Z's reward-to-risk ratio :