Question: What is the expected return and the standard deviation for Tiffin Co. stock? Tiffin Co. Scenario Probability of Scenario Rate of Return Poor Case 0.25

What is the expected return and the standard deviation for Tiffin Co. stock?

Tiffin Co.

Scenario

Probability of Scenario

Rate of Return

Poor Case

0.25

6%

Most Likely

0.50

10%

Good Case

0.25

14%

Assume that you are holding the following portfolio:

Amount Invested

Stock X

$16,000

Beta = 1.3

Stock Y

$48,000

Beta = 1.8

Stock Z

$96,000

Beta = 2.2

If the risk-free rate of return is 2% and the market risk premium is 7%, then what is the required return on the portfolio?

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