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A B RE Use the following information to answer the Question 10. Security Return Standard Deviation 12% 9% 15% 13% 6% 0% Beta 0.75 1.68 0.00 10) Answer the following questions regarding securities A and B above: Which security has the smaller stand-alone risk? (2.5) a. b. Which security has smaller systematic (2.5) (Market) risk? C. If the risk free rate is 3.0% and the expected return on the market is 8.5% what is the beta and expected return of a portfolio that has $5,000,000 invested in security A and $7,500,000 invested in security B? (5) |