Suppose that stock market returns are normally distributed with a mean of 7% and a standard deviation of 20%. There should be about a 2.5% chance of getting a return greater than %. Write your answer as a whole number: eg, 28% = 28.

Assume the CAPM holds and consider stock X, which has a return variance of 0.09 and a correlation of 0.75 with the market portfolio. The market portfolio's Sharpe ratio is 0.30 and the the risk-free rate is 5%. (a) What is Stock X's expected return? (b) What proportion of Stock X's return volatility (i.e. standard deviation) is priced by the market? Explain why this number is less than 1.

Required Rate of Return Suppose rRF = 3%, rM = 8%, and rA = 7%.   Calculate Stock A's beta. Round your answer to one decimal place.    If Stock A's beta were 1.1, then what would be A's new required rate of return? Round your answer to one decimal place.   %

suppose a risk free rate is 6% and the market premium is 7%. D1 is 1.25 per share and stock beta is 1.15. What is the required return?

Assume that the risk-free rate is 7.5% and the required return on the market is 9%. What is the required rate of return on a stock with a beta of 3? Round your answer to two decimal places.

Suppose the risk-free return is 4.5% and the market portfolio has an expected return of 10.3% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.77. What is its expected return? The expected return is %. (Round to two decimal places.)

Assume that the CAPM holds. One stock has an expected return of 10% and a beta of 0.6. Another stock has an expected return of 11% and a beta of 1.5. What is the expected return on the market?

Stocks A and B have the following probability distributions of expected future returns: Probability     A     B 0.1 (7 %) (26 %) 0.1 3   0   0.5 14   22   0.2 20   26   0.1 36   50   Calculate the expected rate of return, , for Stock B ( = 14.20%.) Do not round intermediate calculations. Round your answer to two decimal places.   % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 18.68%.) Do not round intermediate calculations. Round your answer to two decimal places.   % Now calculate the coefficient of variation for Stock B. Do not round intermediate calculations. Round your answer to two decimal places.   Is it possible that most investors might regard Stock B as being less risky than Stock A?   If Stock B is less highly correlated with the market than A, then it might have a higher beta than Stock A, and hence be more risky in a portfolio sense. If Stock B is more highly correlated with the market than A, then it might have a higher…

Stock A has a correlation with the market of 0.53. Assuming that the standard deviation of returns for Stock A is 24.0% and that the standard deviation of returns for the market is 10.0%, what is beta for stock A? A 1.31 B. 1.27 C. 0.17 D. 0.22

Suppose you came up with the following calculations; Assume your utlity function is represented by U E(Rp) 1/2A\sigma_p^2 where your risk aversion parameter A = 25. What is the weight that you must invest in Stock C in order to create your Optimal Portfolio? Present result in decimals, for example, 0.78, not 78 %. Round to 4 decimals. Your Answer: Answer