You have concluded that next year the following relationships are possible. What is your expected rate of return [E(R_i)] for next year?

Economic Status	Probability	Rate of Return
Weak Economy	.25	4%
Static Economy	.50	15%
Strong Economy	.25	25%

		12.83%
		15.75%
		6.00%
		14.75%
		13.50%

Calculate the required return for ABC Industries which has a beta of 1.3 when the risk free rate is 0.05 and you expect the market return to be 0.12.

		8.6%
		9.2%
		14.10
		12.0%
		13.0%