Question

Question 3 Stock A has the following returns for various states of the economy: State of...

Question 3

Stock A has the following returns for various states of the economy:

State of
the Economy Probability Stock A's Return
Recession 5% -15%
Below Average 25% -2%
Average 40% 9%
Above Average 25% 14%
Boom 5% 15%

Stock A's expected return is:

6.60%

7.35%

8.35%

8.85%

Question 8

The U.S. Treasury Bills are yielding 2.5%. What would be the expected return of a stock with beta of 1.91, if S&P 500 is expected to provide a return of 8.75%?

13.3%.

12.9%.

8.2%.

14.4%.

IF YOU CAN'T ANSWER BOTH, DO NOT ANSWER ANY. LET SOMEONE WHO CAN ANSWER IT.

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