1. Based on the probability and percentage of return for the three economic states in the table below, compute the expected return.
Percentage of Return
2. If the risk-free rate is 7 percent and the risk premium is 4 percent, what is the required return?
3. Suppose that the average annual return on the Standard and Poor's 500 Index from 1969 to 2005 was 14.8 percent. The average annual T-bill yield during the same period was 5.6 percent. What was the market risk premium during these 10 years?
3. Conglomco has a beta of 0.32. If the market return is expected to be 12 percent and the risk-free rate is 5 percent, what is Conglomco's required return? Use the capital asset pricing model (CAPM) to calculate Conglomco's required return.
4. Calculate the beta of a portfolio that includes the following stocks:
5. Conglomco stock, which has a beta of 3.9 and comprises 35 percent of the portfolio.
o Supercorp stock, which has a beta of 1.7 and comprises 25 percent of the portfolio.
o Megaorg stock, which has a beta of 0.3 and comprises 40 percent of the portfolio.
11 suppose that we will randomly select a sample of 64 measurements from a population having a mean equal to 20 and a standard deviation equal to 4.
Based on the probability and percentage of return for the three economic states in the table below, compute the expected return. Economic State...