1. An individual has $15,000 invested in a stock with a beta of 0.4 and another $30,000 invested in a stock with a beta of 1.2. If these are the only two investments in her portfolio, what is her portfolio's beta? Round your answer to two decimal places.
2. Assume that the risk-free rate is 4.5% and the required return on the market is 13%. What is the required rate of return on a stock with a beta of 1.3? Round your answer to two decimal places.
3. A stock sells for $30. The next dividend will be $3 per share. If the rate of return earned on reinvestment funds is a constant 12% and the company reinvests 50% of earnings in the firm, what must be the discount rate?