If the risk-free rate is 8.0%, the market risk premium is 10.0%, and the expected return on Security J is 37.9%, what is the beta for Security J ? 14.95 2.99 18.22 2.67 8.17 What is the expected return for the following portfollo? (state your answer in percent with two decimal places.) Stock Expected returns Investment AMA311$500,000 BBB 261$1,200,000 cCC 18∗$1,300,000 DDD a $1,500,000 21.27% 16.40% 20.12% 18.58% 22.87% What is the expected return for the following stock? (State your answer in percent with one decimal place.) Outcomes Possible returna Probability better 408151 same 274281 worse 138.578 18.52% 20.97% 22.71% 24.01% 25.81%
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Sol: Question 1 Risk free rate = 8.0% Market Risk Premium = 10% Expected return = 37.9% To
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