Question: Question 2 [ 1 0 points ] : The following are estimates for two stocks: The market index has a standard deviation of 2 2

Question 2[10 points]: The following are estimates for two stocks:
The market index has a standard deviation of 22% and the risk-free rate is 8%.
a. What are the standard deviations of stocks A and B? Which stock is overall more risky?
b. Which stock has higher firm specific risk? Why?
c. Which stock has greater systematic risk? Why?
d. What are the correlation coefficients of stocks A and B with the market?Suppose that we were to construct a portfolio with proportions:
e. Compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio.
Question 2[10 points]: The following are estimates for two stocks: The

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