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

Q: Stock X has an expected return of 12 percent, a standard deviation of returns of 14 percent, a correlation coefficient with the market of 0.9, and a beta coefficient of 0.9. Stock Y has an expected return of 5 percent, a standard deviation of 31 percent, a 0.4 correlation with the market, and a beta of 0.5. Which security would be riskier if it were held by itself as a single investment?

Q:

Stock H has a beta of 1.5, while Stock L has a beta of 0.5. If investors aversion to risk increased...

Selected Answer:	c. the risk premium of Stock H would increase by more.
Answers:	a. the risk premiums of Stock H and L would remain unchanged.
	b. the risk premium of Stock L would increase by more.
	c. the risk premium of Stock H would increase by more.
	d. the risk premiums of Stock H and L would increase by the same amount.

Q: A stocks returns have the following distribution:

Probability	Stock Return
0.15	12%
0.70	16%
0.15	42%

Calculate the stocks expected return.