1. You have a portfolio of two stocks held in equal weights. The ABC stock has a beta of 1.4, and the XYZ stock has a beta of -0.1. The risk free rate is 4% and the market risk premium is 7%. What is the return on the portfolio? Enter as a percent and round to the nearest hundredth of a percent.
2. You buy 1,000 shares IBM stock for $101 and 500 shares of Starbucks stock for $90. IBM stock goes down in value to $94/share, while Starbucks increases to $98/share. You do not sell or buy any additional shares. What is the return on your portfolio?
Enter as a percent and round to the nearest tenth of a percent.