Question: A B C D E F G H K 1 Part 3 1. Assume the following information: Expected market return = 15.23%, market standard

A B C D E F G H K 1 Part 3

A B C D E F G H K 1 Part 3 1. Assume the following information: Expected market return = 15.23%, market standard deviation 11.31%, portfolio standard deviation = 8.5%, and the risk-free rate = 4.62%. 2 3 a. Calculate the expected portfolio return using the Capital 4 b. Calculate the Sharpe ratio 5 c. What is the slope of the Capital Market Line? 6 7 2. Calculate the Beta of each security's returns to the Market returns from the table below 8 Year Security A Returns Security B Returns Market Returns 91 6.00% 11.00% 10.00% 10 2 11 3 12 4 13 5 14 6 15 7 16 17 5.00% 8.60% 8.50% 1.00% 8.20% 7.00% 0.00% -3.00% -2.00% -2.00% -7.00% -3.40% 5.00% 9.00% 8.25% 7.00% 13.90% 14.00% 3. Assume the risk free rate = 2.5% and using the betas from above and market returns 18 a. Security Market 19 b. Security Market 20 c. Security risk 21 d. Security risk 22 09

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