1. The standard deviation of stock returns for Stock A is 40%. The standard deviation of the market return is 24%. If the correlation between Stock A and the market is 0.90, then what is Stock A's beta? Round your answer to two decimal places.

2. An analyst has modeled the stock of Crisp Trucking using a two-factor APT model. The risk-free rate is 7%, the expected return on the first factor (r1) is 11%, and the expected return on the second factor (r2) is 8%. If bi1 = 0.6 and bi2 = 0.8, what is Crisp's required return? Round your answer to two decimal places.

3a. Stock A has an expected return of 12% and a standard deviation of 45%. Stock B has an expected return of 19% and a standard deviation of 65%. The correlation coefficient between Stocks A and B is 0.2. What is the expected return of a portfolio invested 20% in Stock A and 80% in Stock B? Round your answer to two decimal places.

3b. What is the standard deviation of a portfolio invested 20% in Stock A and 80% in Stock B? Round your answer to two decimal places.

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1 Beta correlation std dev of stockstd dev of market 094024 15 2 Re... View the full answer