Finding the beta of portfolio

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There is a 37.05% probability of an average economy and a 62.95% probability of an above average economy. You invest 44.90% of your money in Stock S and 55.10% of your money in Stock T. In an average economy the expected returns for Stock S and Stock T are 10.31% and 8.29% , respectively. In an above average economy the the expected returns for Stock S and T are 39.65% and 17.35% , respectively. What is the expected return for this two stock portfolio?

You are invested 20.22% in growth stocks with a beta of 1.727 , 20.15% in value stocks with a beta of 0.604 , and 59.63% in the market portfolio. What is the beta of your portfolio?

An analyst gathered the following information for a stock and market parameters: stock beta = 0.809 ; expected return on the Market = 12.48% ; expected return on T-bills = 3.57% ; current stock Price = $8.78 ; expected stock price in one year = $11.60 ; expected dividend payment next year = $1.24 . Calculate the required return and expected return for this stock.

a) Required Return :

b) Expected Return :

The market risk premium for next period is 5.44% and the risk-free rate is 1.84% . Stock Z has a beta of 1.259 and an expected return of 9.54%. Compute the following:

a) Market's reward-to-risk ratio :

b) Stock Z's reward-to-risk ratio :

Reference no: EM132700946

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