Compare the required return on these stocks calculated using CAPM in question #3 against their historical return over the last 52 weeks, found in the Yahoo!Finance - Key Statistics. Is there a difference between these returns? Is this a problem? Why is there a difference?

3. If you made 70% of dollar investment in stock A, and 30% of dollar investment in stock B, what would be the beta of your portfolio? Please how your work.

= (0.70 * 0.54) + (.30 * 0.19)

= 0.378 + .057

Beta = 0.435

Using CAPM the required return for

Target =1.7% + 0.54*5% =4.40%

Wal-Mart = 1.7%+ 0.19*5% =2.65%

Target

52-Week Change 3 -0.17%

S&P500 52-Week Change 3 -1.06%

52 Week High 3 85.81

52 Week Low 3 66.46

50-Day Moving Average 3 81.45

200-Day Moving Average 3 75.60

Wal-Mart

52-Week Change 3 -13.18%

S&P500 52-Week Change 3 -1.06%

52 Week High 3 80.93

52 Week Low 3 56.30

50-Day Moving Average 3 67.81

200-Day Moving Average 3 63.36