1. Find the correlation between the country (Philippines) stock index return and the USA index return. Would it be beneficial from the point of view of international portfolio diversification to invest in this country for an investor holding only the USA index portfolio?
2. The treasurer at Corning Inc. is checking the beta he estimated from regressing a time series of stock returns on market returns. He determines that the expected return on equity for the firm is 14.92%. The current T-bill rate is 5.86%, the expected market return is 14.53% and the market premium is 8.67%. What is the stock's beta?