Question

The beta of four stocks- P, Q, R and S- are. 0.55, 0.85, 1.04, and 1.45,...

The beta of four stocks- P, Q, R and S- are. 0.55, 0.85, 1.04, and 1.45, respectively and the beta portfolio 1 is 0.97, the beta of portfolio 2 is 0.86, and the beta of portfolio 3 is 1.08. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 5.0% (risk-free rate) and a market premium of 10.5% (slope of the line)?

​What is the expected return of stock P?

What is the expected return of stock Q?

What is the expected return of stock R?

What is the expected return of stock S?

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