Question 9

If the expected return on Stock A is 13.46% and the return on the market is 7%. What is the beta for Stock A if the risk-free rate is 3%?

Hint: Use the CAPM equation to get the answer.

Enter your answer in percentages rounded off to two decimal points. D0 not enter % in the answer box.

Question 10

Suppose your portfolio consists of Stock A and Stock B. Stock A has an expected return of 16.3% and Stock B has an expected return of 6.7%. If your goal is to create a portfolio with an expected return of 8.8%, what is your weight in Stock A?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

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Question 11

Given the investment in Stocks A, B, and C, compute the portfolio beta. Enter your answer rounded off to two decimal points

Stock	Investment	Beta
A	$1800	1.44
B	$2400	1.58
C	$3400	0.92

Question 12

Given the investment in Stocks A, B, and C, compute the expected return on the portfolio. Enter your answer in percentages, rounded off to two decimal points. Do not enter % in the answer box.

Stock	Investment	Exp Returns
A	$1500	8%
B	$2000	4%
C	$2500	-2%

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Question 13

The common stock of Detroit Engines has a beta of 1.84. The expected return on the market is 11 percent and the risk-free rate is 3 percent. What is the firms expected return, E(Ri)?

Hint: Use the CAPM equation to get the answer.

Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.