An analyst performs a five year forecast for the annual total return, annualized standard deviation of returns, and market risk for the S&P500 and for five stocks in the S&P 500 (i.e. Stocks A-E). Use the information in the table below to help answer problems 1-6: 5STDEV (o) Market Risk 19.3% 34.8% 17.8% 23.9% 19 7% 32.1% 2 SP 500 Stock A Stock B Stock C Stock D Stock E 12.0% 24.2% 12.6% 15.4% 20.0% 37.0% 19.0% 25.0% 8.0% 17.8%, 9.4% | 10.6%| 10.2%| 35.0% -61.0% 31.0% -43.0% -34.5% 19.3% 30.9% 15.4% 23.2% 17.4% 290% 8.0% 17.8% 496 9.4% 10.6% 10.2% 16.0% 13.8%) 22.0% 21.0% | 34.0% ) 16.0%| -56.5% 1. Which stock has the highest beta? a. Stock A b. Stock B c. StockC d. Stock D e. Stock 2. Which stock has the most firm-specific or idiosyncratic risk? a. Stock A b. Stock c. Stock C d. Stock D e. Stock E 3. Calculate the five year arithmet ic average return for each of the five stocks. Based on this information, use the Sharpe Ratio to determine the stock with the best return vs. risk profile: a. Stock A b. StockB c. Stock C d. Stock D e. Stock B 4. Today (T=0) you invest $10,000 in Stock E. At the end of year 5 (T=5), what is the five year Compound Annual Growth Rate of your investment? Hint: This is the same as calculating a five year geometric average. a. b. c. d. e. 31.5% 6.3% 4.4% (0.9%) (4.4%)