Hi,

Could you help me solve these problems? I would really appreciate it.

1. Assume that the risk-free rate is the current 10 year Treasury bond rate. You estimate that the market risk premium is 7%. (Show your work)

What is the required rate of return with a stock with Beta of 1.1?

What is the required rate of return with a stock Beta of 8.0?

2.Analysts have estimated the following about H-D stock:

Demand for the Co.'s Product	Probability of this Demand	Associated Rate of Return
weak	0.1	-50%
below average	0.2	-5
average	0.4	16
above average	0.2	25
strong	0.1	60

Calculate the stock's expected return, standard deviation, and coefficient of variation. (Show calculations)