QUESTION 52 Stock A has an expected return of 11% and a standard deviation of 25%....

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QUESTION 52 Stock A has an expected return of 11% and a standard deviation of 25%. Stock B has an expected return of 16% and a standard deviation of 20%. Assume that risk free rate is 6% and the market risk premium, r M - RF, = 8%. Portfolio AB: 50% invested in Stock A; 50% invested in Stock B. The correlation between stock A and B is 0. Choose the correct answer. Beta of stock A = 0.93 Portfolio of AB is riskless, because the two stocks are not correlated. Stock B's beta is 1.25. Portfolio AB's return is 14.34%. QUESTION 52 Stock A has an expected return of 11% and a standard deviation of 25%. Stock B has an expected return of 16% and a standard deviation of 20%. Assume that risk free rate is 6% and the market risk premium, r M - RF, = 8%. Portfolio AB: 50% invested in Stock A; 50% invested in Stock B. The correlation between stock A and B is 0. Choose the correct answer. Beta of stock A = 0.93 Portfolio of AB is riskless, because the two stocks are not correlated. Stock B's beta is 1.25. Portfolio AB's return is 14.34%.