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1. Assume that the distribution of the return rates of Company A and broad market M is as follows: Economic boom Probability

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lW To eb tain Comelalion coelficient to ne neud Erpected orise and mo put Reture Enpected Risk aud Relum o slock A !- (1x43)1Shift Correlalion 20.2b 20-25 COVAM Y-2Qx4.09 29.63 2の •69 COVAM 20.25 Beta A :- 52.24 • 39 O standar d devialion of pôrto uAlt o Reluso 1% + ·89 ( 3.5 -1) It.995 1.975 Estimated Reliun 8.5 Knpected Reluso ie Equúlibrium Reluro = 1.9y5 is SlocK A uu

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