1. Use the following information to answer the questions.

Security	Beta	Standard Deviation	Expected return
S&P 500 Risk-free security Stock D Stock E Stock F	1.0 0.0 ( ) 0.8 ( )	20% 0% 30% 15% 25%	10.0% 4.0% 13.0% ( )% ( )%

1. Figure out a beta for Stock D and an expected return for Stock E using the CAPM equation.
2. Stock F has a correlation with S&P 500 of 0.6 while the standard deviation of Stock F is 25% and the standard deviation of S&P is 20%. Figure out a beta for Stock F.
3. If Stock F has an expected return of 12%, figure out the abnormal return, alpha (), based on CAPM and the beta you figure out in Question 3) (If you would like, you can use a beta of 1 instead.).
4. You form a complete portfolio by investing $8,000 in S&P 500 and $2,000 in the risk-free security. Given the information about S&P 500 and the risk-free security on the table, figure out an expected return, a standard deviation, and a beta for the complete portfolio.