Question: a) Which is the most preferable portfolio if an investor is only investing in that portfolio? b) Which stock is the best if CAPM is

a) Which is the most preferable portfolio if an investor is only investing in that portfolio?

b) Which stock is the best if CAPM is used as a benchmark?

c) If all these portfolios have the same total risk as the market protfolio, how much more returns would the most preferable portfolio have compared to the market returns?

d) If an investor wants to include A, B, C or D into a well-diversified portfolio, which is the most preferable, or is it none of the above?

	A	B	C	D	Market Returns
Average Returns	12%	10%	15%	20%	8%
Beta	1.2	0.8	1	2	1
Standard deviation	20%	16%	30%	45%	15%

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