Question: FINC 3630 - Assignment 3 Qin - Fall 2020 2. Consider a stock with beta equal to 1.5, a risk-free rate of 3%, and a

FINC 3630 - Assignment 3 Qin - Fall 2020 2. Consider

FINC 3630 - Assignment 3 Qin - Fall 2020 2. Consider a stock with beta equal to 1.5, a risk-free rate of 3%, and a market return of 10%. What is the expected return of the stock using CAPM? 3. We have 10 stocks with the same standard deviation of 20%. Assume CAPM market beta captures all undiversifiable risk. a. If all 10 stocks all have zero market beta, what is the standard deviation of an equally-weighted portfolio of these 10 stocks? b. If all 10 stocks all have a market beta of 1, what is the standard deviation of an equally-weighted portfolio of these 10 stocks

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