A stock has an expected return of 16.5 percent, the risk-free rate is 4.2 percent, and the market

QUESTION

1. A stock has an expected return of 16.5 percent, the risk-free rate is 4.2 percent, and the market risk premium is 8.6 percent. What must the beta of this stock be? (Round your answer to 2 decimal places.)2. A stock has an expected return of 14.8 percent, its beta is .80, and the risk-free rate is 3.1 percent. What must the expected return on the market be? (Round your answer to 2 decimal places. Omit the “%” sign in your response.)3. A stock has an expected return of 14.5 percent, a beta of 1.80, and the expected return on the market is 10.2 percent. What must the risk-free rate be? (Round your answer to 2 decimal places. Omit the “%” sign in your response.)4. A stock has a beta of 1.4 and an expected return of 13.3 percent. If the risk-free rate is 4.4 percent, what is the market risk premium? (Round your answer to 2 decimal places. Omit the “%” sign in your response.)5. You own a stock portfolio invested 20 percent in Stock Q, 35 percent in Stock R, 35 percent in Stock S, and 10 percent in Stock T. The betas for these four stocks are 1.2, 0.7, 1.3, and 0.9, respectively. What is the portfolio beta? (Round your answer to 3 decimal places.)6. You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.75, and the total portfolio is exactly as risky as the market, what must the beta be for the other stock in your portfolio? (Round your answer to 2 decimal places.)7. A share of stock sells for $42 today. The beta of the stock is 1.4, and the expected return on the market is 14 percent. The stock is expected to pay a dividend of $1.50 in one year. If the risk-free rate is 4.1 percent, what should the share price be in one year? (Round your answer to 2 decimal places. Omit the “$” sign in your response.)8 A stock has a beta of 0.9 and an expected return of 8 percent. A risk-free asset currently earns 3 percenta. What is the expected return on a portfolio that is equally invested in the two assets? (Round youranswer to 2 decimal places. Omit the “%” sign in your response.)Expected returnb. If a portfolio of the two assets has a beta of 0 8. what are the portfolio weights?(Round your answersto 2 decimal places. Omit the “%” sign in your response.)Weightc. If a portfolio of the two assets has an expected return of 6 percent, what is its beta? (Round youranswer to 2 decimal places.)Be!?.d. If a portfolio of the two assets has a beta of 3.60, what are the portfolio weights? (Negative amounts  should be indicated by a minus sign. Omit the “%” sign in your response.)Weight Xrf%9. Asset W has an expected return of 13 percent and a beta of 1.3. If the risk-free rate is 3.1 percent, what is the market risk premium? (Round your answer to 2 decimal places. Omit the “%” sign in your response.)10. Stock Y has a beta of 1.15 and an expected return of 14.2 percent. Stock Z has a beta of 0.7 and an expected return of 10 percent. What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other? (Round your answer to 2 decimal places. Omit the “%” sign in your response.)11. You have a $1,000 portfolio which is invested in stocks A and B plus a risk-free asset. $300 is invested in stock A. Stock A has a beta of 1.3 and stock B has a beta of 0.6. How much needs to be invested in stock B if you want a portfolio beta of 0.8?12 Suppose you observe the following situationSecurity BetaSanders 1.3Janicek 1.4Expected Return22%20.14What must the percentaqe risk-free rate be if they are correctly priced?13. A stock has a beta of 1.5 and an expected return of 15 percent. If the risk-free rate is 5.2 percent, what is the percentage market risk premium?14. A share of stock sells for $54 today. The beta of the stock is 1.3, and the expected return on the market is 10 percent. The stock is expected to pay a dividend of $1 in one year. If the risk-free rate is 4.8 percent, what will the share price be in one year?refer attachment for complete questions

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