Indicate the answer choice that best completes the statement or answers the question 3. Porter Ine's stock has an expected return of 12.00%, a beta of 1.25, and is in equilibrium. If the risk-free rate is b. 7.76% c. 7.68% d. 9.92% c. 8.00% -24. Stock A has an expected return of 12%, a beta of 1.2, and a standard deviation of 20%. Stock B also has a beta on 1.2, but its expected return is 10% and its standard deviation is 15%. Portfolio AB has $900,000 invested in Stock A and $300,000 invested in Stock B. The correlation between the two stocks' returns is zero (that is, vA. -0). Which of the following statements is CORRECT? a. Portfolio AB's expected return is 11.0% b. The stocks are not in equilibrium based on the CAPM; if A is valued correctly, then Bis overvalued c. Portfolio AB's beta is less than 1.2. d. The stocks are not in equilibrium based on the CAPM; if A is valued correctly, then B is undervalued. e. Portfolio AB's standard deviation is 17.5%. . er fra