Question: Please answer the following questions and explain the reasons based on the CAPM. a. If security A is riskier (has a higher volatility) than security

Please answer the following questions and explain the reasons based on the CAPM.

a. If security A is riskier (has a higher volatility) than security B, what can you say about the expected return on A compared to the expected return on B?

b. What should your portfolio look like?

c. Should you get a higher expected return on a stock which is positively or negatively correlated with the market portfolio?

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