Question: Problem 11-1 Based on the following probability distribution, what is the security's expected return? State Probability r___ 1 0.2 -5.0% 2 0.3 10.0 3 0.5

Problem 11-1

Based on the following probability distribution, what is the security's expected return?

State Probability r___

1 0.2 -5.0%

2 0.3 10.0

3 0.5 30.0

Problem 11-3

Susan's investment portfolio currently contains three stocks that have a total value equal to $100,000. The beta of this portfolio is 1.5. Susan is considering investing an additional $50,000 in a stock that has beta equal to 3. After she adds this stock, what will be the portfolio's new beta?

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