Following are rates of return on medical equip. company's stock and debt, and on the market portfolio, along with the probability of each state.
State Prob. Ret.on Stock Ret.on Debt Ret.on Market
1 .1 3 8 5
2 .3 8 8 10
3 .4 20 10 15
4 .2 15 10 20
What is the stock beta?
By calculating expected returns
Stock .115
Debt .09
Market .125
.011/.012 = .92????