Calculate the expected rate of return on the stock

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-A stock has a beta of 1.2, the expected return on the market is 14 percent, and the risk-free rate is 6.7 percent. What must the expected return on this stock be?

-Stock XX has a beta of 1.2 and an expected return of 18 percent. Stock YY has a beta of .80 and an expected return of 12.5 percent. If the risk-free rate is 8 percent and the market risk premium is 7.5 percent, are these stocks correctly priced? Interpret the results.

-Given the following data for a stock: risk-free rate = 4%; factor-1 beta = 1.5; factor-2 beta = 0.5; factor-1 risk-premium = 8%; factor-2 risk-premium = 2%. Calculate the expected rate of return on the stock using the two-factor APT model.

-You own a stock portfolio invested 15 percent in Stock X, 35 percent in Stock Y, 29.5 percent in Stock Z, and 20.5 percent in Stock K. The betas for these four stocks are 0.4, 2, 1.35, and -0.2, respectively. What is the portfolio beta?

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