finance-A stock has an expected return of 16.5 percent

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.)

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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?

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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?

 

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