What must the beta be for the other stock in your portfolio

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1. You own a portfolio equally invested in a riskfree asset and two stocks. If one of the stocks has a beta of 1.1 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

2. What should Indigo Inc sell for to an investor that requires a 12% return if the last dividend was $1.20? Assume dividends will grow indefinitely at a rate of 7% per year.

3. A stock has a beta of 1.6, the expected return on the market is 11 percent, and the risk-free rate is 6.05 percent. What must the expected return on this stock be?

Reference no: EM132031715

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