1. A stock has an expected return of 11 percent, its beta is .85, and the risk-free rate is 5.5 percent. What must the expected return on the market be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Market expected return=
2. You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.27 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Beta=