A. (4 marks) Given the following historical returns on Alpha stock, calculate the average retum, the variance, standard deviation, and cocfficient of variation for this stock. Interpret your Answers Year 2016 2017 2018 2019 2020 Alpha return 4% 10% 22% -896 B. (6 marks) Suppose you equally invest $700,000 in two stocks with the following characteristics Stock X has an expected return of 12% and a standard deviation of %6. Stack Thus an expected return of 22% and a standard deviation of 14% Determine the expected return and standard deviation on a portfolio of stocks X and T, when the two stocks are uncorrelated and when they are negatively perfectly correlated Interpret and compare your answers in these two cases. C. (mark) Suppose the current market risk expected excess retum is 10% Company has a Mandard deviation of 10%, a beta oro. and as expected rate of return of 16.3%. The standard deviation of the market portfolio wa 14%. Assume that all stocks are correctly priced by the CAPM 1. What are the levels of the risk-free rate and the expected return on the market portfolio in this economy? (3 marks) 2. Company has a standard deviation of 16% and a beta of 1.4 What is the expected return on company. 622 marka) 3. Suppose you invested $275,200 in 2 and G stocks. The beta of your portfolio is 1.25. How much did you invest in each stock? What is the expected retum of this portfolio? Is it efficient if its standard deviation is 1257 Explain and interpret your answer (mark)