Chapter 10 Problems 2 13 19 222. The table below shows the one-year return distr

Chapter 10 Problems 2 13 19 222. The table below shows the one-year return distribution of Startup Inc. Calculatea. The expected return.b. The standard deviation of the return.13.
Consider an economy with two types of firms S and I. S firms all move
together. I firms move independently. For both types of firms there is a
60% probability that the firms will have 15% return and a 40%
probability that the firms will have a -10% return. What is the
volatility (standard deviation) of a portfolio that consists of an equal
investment in 20a. Type S firms?b. Type I firms?19. Suppose the market portfolio is equally likely to increase by 30% or decrease by 10%.a.
Calculate the beta of a firm that goes up on average by 43% when the
market goes up and goes down by 17% when the market goes down.b.
Calculate the beta of a firm that goes up on average by 18% when the
market goes down and goes down by 22% when the market goes up.c. Calculate the beta of a firm that is expected to go up by 4% independently of the market.22.
Suppose the market risk premium is 6.5% and the risk-free interest rate
is 5%. Calculate the cost of capital of investing in a project with a
beta of 1.2