Assume that security returns are generated by the single$-$index model,

Assume that security returns are generated by the single$-$index model,

$R_i={}_i+b_i{R}_M+e_i$

where $R_i$ is the excess return for security i and $R_M$ is the market's excess return. The risk$-$free rate is $4\%.$ Suppose also that there are

three securities $A,B,$ and $C,$ characterized by the following data:

Required:

a$.$ If ${}_M=22\%,$ calculate the variance of returns of securities $A,B,$ and $C$

b$.$ Now assume that there are an infinite number of assets with return characteristics identical to those of $A,B,$ and $C,$ respectively.

What will be the mean and variance of excess returns for securities $A,B,$ and $C?$

Complete this question by entering your answers in the tabs below.

Required A Required $B$

Now assume that there are an infinite number of assets with return characteristics identical to those of $A,B,$ and $C,$

respectively. What will be the mean and variance of excess returns for securities $A,B,$ and $C?$

respectively. What will be the mean and variance of excess returns for securities $A,B,$ and $C?$ Note: Enter the variance answers as a percent squared and mean as a percentage. Do not round intermediate calculations.

Note: Enter the variance answers as a percent squ Round your answers to the nearest whole number.

$R_i={}_i+{}_i{R}_M+e_i$

where $R_i$ is the excess return for security i and $R_M$ is the market's excess return. The risk$-$free rate is $4\%.$ Suppose also that there are

three securities $A,B,$ and $C,$ characterized by the following data:

Required:

a$.$ If ${}_M=22\%,$ calculate the variance of returns of securities $A,B,$ and $C.$

b$.$ Now assume that there are an infinite number of assets with return characteristics identical to those of $A,B,$ and $C,$ respectively.

What will be the mean and variance of excess returns for securities $A,B,$ and $C?$

Complete this question by entering your answers in the tabs below.

If ${}_M=22\%,$ calculate the variance of returns of securities $A,B,$ and $C$

Note: Do not round intermediate calculations. Round your answers to the nearest whole number.