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1.
Consider the following returns and states of the economy for TZ.Com.:
| Economy | Probability | Return |
| Weak | 20% | -10% |
| Normal | 20% | 7% |
| Strong | 60% | 20% |
What is the standard deviation of TZ's returns?
2.
You decide to form a portfolio of the following amounts invested in the following stocks. What is the beta of the portfolio?
SET YOUR CALCULATOR TO 4 DECIMAL PLACES THEN INPUT THE NUMBER ROUNDING TO 2 DECIMALS i.e. if your answer is 1.2455, enter it as 1.25 ONLY
| Stock | Amount | Beta | Expected Return |
| Apple | $8,545 | 1.56 | 10.50% |
| Microsoft | $3,832 | 2.46 | 16.90% |
| Ford | $5,536 | 0.50 | 15.75% |
| Time Warner | $4,453 | 1.05 | 11.80% |
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