Learning Goal: I’m working on a management question and need support to help me

Learning Goal: I’m working on a management question and need support to help me learn.Problem 1 Intro Nautilus Clothing’s stock has a 40% chance of producing a 15% return, a 20% chance of producing a 18% return, and a 40% chance of producing a -13% return. Part 1 What is the stock’s expected return? Problem 2 Intro The table below shows the expected rates of return for three stocks and their weights in some portfolio: Stock A Stock B Stock C Portfolio weights 0.4 0.2 0.4 State Probability Expected returns Recession 0.3 0.06 0.03 0.15 Boom 0.7 0.11 0.05 0.16 Part 1 What is the portfolio return during a recession? Part 2 What is the expected portfolio return? Part 3 What is the standard deviation of the portfolio returns? Problem 3 Intro You’ve assembled the following portfolio: Stock Expected return Beta Portfolio weight 1 0.074 1.8 0.2 2 0.053 1.1 0.5 3 0.047 0.9 0.3 Part 1 What is the expected return of your portfolio? Problem 4 Intro Use the expected return-beta equation from the CAPM. Part 1 What is the expected return for the market if the risk-free rate is 2%, beta 0.6 and the expected return 12%?

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