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5% 20% 2% 30% The folowing table gives an analtysts expected return on two stocks for particular market returns [2 marks) What are the betas of the two stocks? i. What is the expected return on each stock if the market return is equally likely to be 6% or 20%. [2 marks) iii.f the risk free rate is 7% and the market return is equally likely to be 6% or 20% what is the Security Market Line? [2 marks) Based on the above which stock will be over- valued; which stock will be under- valued above security market line? Explain investors reactions to the situation. [5 marks)
o1. If you had purchased the stock for $61 on the last day of January 2008, what rate of return per month would you have earned had you sold it the last day of December 2009?
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Giten, ensive shek 오ソ. Betas two ztocks C P) ernuta mula: β : change un Stock se ettm Change in Mastkc ref Aggre give stock( : 30-2 3O-2 - 28 Pes 20-6 チ 0、5千(menpeene onive R91 ヒ Pス。 1 +1s 84 :44 Expe eted Ret )의 both to ces ane ルソ, and t2ソ. elton 520다. Calculating .Accuirty卜laveeftrn, 2 By subs htring:.이. + 2.28:/. :98 . o hle get Aggresive 16 . Deengie stock 12-1 9.28% in bath he to

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