You have observed the following returns over time for Eastman Chemical Bonding (ECB) and Wilder's Creations and Buildings (WCB). Assume that the risk-free rate is 6% and the market risk premium is 5%.

Year ECB WCB Market

2011 40.00% 40.00% 35%

2012 10.00% 15.00% 10%

2013 35.00% 5.00% 30%

2014 5.00% 10.00% -10%

2015 15.00% 35.00% 25%

Please Show Work:

The beta of stock ECB is: (Choices are 1.15,1.07,1.20,1.00,1.17)

The beta of stock WCB is: (Choices are 0.99,0.77,0.92,0.95,0.84)

The required rate of return on stocks ECB is: (Choices are 9.85%,11.35%,10.25%,11.25%,11.00%)

The required rate of return on stocks WCB is: (Choices are 9.85%,11.35%,10.25%,11.25%,11.00%)

The required rate of return on a portfolio consisting of 80% of stock ECB and 20% of stock WCB is: (Choices are 11.05%,9.50%,11.75%,10.25%,10.85%)