Question: *CANNOT USE EXCEL TO SOLVE. CAN USE CALCULATOR FUNCTIONS. PLEASE SHOW ALL STEPS. Q: A stocks returns have the following distribution: Probability Stock Return 0.3

*CANNOT USE EXCEL TO SOLVE. CAN USE CALCULATOR FUNCTIONS. PLEASE SHOW ALL STEPS.

Q:

A stocks returns have the following distribution:

Probability Stock Return
0.3 11%
0.4 15%
0.3 45%

The stocks expected return is 16.2%. Calculate its standard deviation.

Selected Answer:

b.

28.00%

Answers:

a.

56.00%

b.

28.00%

c.

19.13%

d.

21.71%

e.

22.88%

Q: An individual has $65,000 invested in a stock with a beta of 0.8 and another $85,000 invested in a stock with a beta of 1.7. If these are the only two investments in her portfolio, what is her portfolio beta?

Q: Assume that the risk-free rate is 3.5 percent and the market risk premium is 7.5 percent. What is the expected return for the overall stock market?

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