Problem #3 (15 marks) You are following 5 different stocks and need to issue a recommendation (buy, hold or sell) to your customers. The market return is 10%, with a standard deviation 15%. The risk-free rate is 3%. The CAPM is assumed to hold. Security Expected Standard Beta Recommendation return Deviation Avery Airline 15% 19% 1.6 Bubba's Bakery 10% 13% 1.15 Carter Crystal 8% 10% 0.65 Dee's Designs 9% 14% 0.8 Ernie's Electronics 16% 1.35 a) State your recommendation (buy, hold, sell) for each security. Show your work (2 marks each) b) Plot and label the Security Market Line (SML) and plot each stock's Expected Return, Required Return and Risk (5 marks) 12%