Assume that the risk-free rate is 2.5% and the market risk premium is 8%. What is the required return for the overall stock market? Round your answer to one decimal place.  ? % What is the required rate of return on a stock with a beta of 0.5? Round your answer to one decimal place. ?  %     The above is a two part question, therefore the second answer is determined based off the first answer provided. Please, please, please do provide both answers.

onsider the following table, which gives a security analyst’s expected return on two stocks and the market index in two scenarios:  Scenario Probability Market Return Aggressive Stock Defensive Stock 1 0.5 7% 2.2% 5.0% 2 0.5 15 25 12   Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.)   b. What is the expected rate of return on each stock? (Round your answers to 2 decimal places.)

Assume the Black-Scholes framework. You are given: i. S(t) is the stock price at time t. ii. The stock's volatility is 25%. iii. The continuously compounded expected rate of return is 8%. iv. The stock pays dividends continuously at a rate of 3% proportional to its price. v. The continuously compounded risk-free interest rate is 4%. vi. The current stock price is S (0) 125. Calculate Pr (S (4) > 150 S (2) - 120). Possible Answers A. 0.30 0.40 C 0.65 D. 0.70 0.85

A stock has a required return of 16%, the risk-free rate is 5.5%, and the market risk premium is 4%. a) What is the stock's beta?  b) If the market risk premium increased to 8%, what would happen to the stock's required rate of return? Assume that the risk-free rate and the beta remain unchanged. Do not round intermediate calculations. Round your answer to two decimal places.