Question: Hello, can someone help me answer these questions? They are all linked to each other. Thank you 13.The expected rate of return on the market

Hello, can someone help me answer these questions? They are all linked to each other. Thank you

13.The expected rate of return on the market portfolio is 12.50% and the risk-free rate of return is 3.25%. The standard deviation of the market portfolio is 17.50%.What is the representative investor's average degree of risk aversion?Note that the degree of risk aversion is shown as a number rather than a percentage.

14. Stock A has a beta of 1.95 and a standard deviation of return of 41%. Stock B has a beta of 3.75 and a standard deviation of return of 65%.Assume that you form a portfolio that is 60% invested in Stock A and 40% invested in Stock B.Using the information in question 13, according to CAPM, what is the expected rate of return on your portfolio?

15.Using the information in questions 13 and 14, what is your best estimate of the correlation between stocks A and B? Note that correlation is shown as a number rather than a percentage.

16.Your forecasting model projects an expected return of 26.00% for Stock A and an expected return of 44.00% for Stock B. Using the information in questions 13 and 14 and your forecasted expected returns, what is your best estimate of the alpha of your portfolio when using CAPM to determine a fair level of expected return?

17.Using the data from problem 16, according to CAPM, is your portfolio undervalued, overvalued, or fairly valued?

18. A different analyst uses a two-factor APT model to evaluate expected returns and risk. The risk premiums on the factor 1 and factor 2 portfolios are 4.95% and 2.75%, respectively, while the risk-free rate of return remains at 3.25%.According to this APT analyst, your portfolio formed in question 14 has a beta on factor 1 of 5.50 and a beta on factor 2 of 3.50.According to APT, what is the expected return on your portfolio if no arbitrage opportunities exist?

19.A different analyst uses a two-factor APT model to evaluate expected returns and risk. The risk premiums on the factor 1 and factor 2 portfolios are 4.95% and 2.75%, respectively, while the risk-free rate of return remains at 3.25%.According to this APT analyst, your portfolio formed in question 14 has a beta on factor 1 of 5.50 and a beta on factor 2 of 3.50.According to APT, what is the expected return on your portfolio if no arbitrage opportunities exist?

20.Using the data from problem 19, according to APT, is your portfolio undervalued, overvalued, or fairly valued?

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