QUESTION 7 1 pointsSave Answer Stock A has an expected return of 12%, a beta of 1.2 and a standard deviation of20%. Stock B also has a beta of 1.2, but its expected return is 10% and its standard deviation is 15%. Portfolio AB has S 300,000 invested in Stock A and S 100,000 invested in Stock B. The correlation between the two stocks' returns is zero (that is, rAB-0). Which of the following statements is CORRECT? O a The stocks are not in equilibrium based on the CAPM; if A is valued correctly, then B is undervalued Ob. The stocks are not in equilibrium based on the CAPM; if A is valued correctly, then B is overvalued Oa, Portfolio AB's expected return is 11.0%. Od. Portfolio AB's beta is less than 1.2 Portfolio AB's standard deviation is 17.5%. QUESTION 8 1 points Save Answer Assume that the risk-free rate is 5%, which of the following statements is CORRECT? a. If a stock's beta doubled, its required return under the CAPM would also double. b. If a stock has a negative beta, its required return under the CAPM would be less than 5%. Oo. If a stock's beta were less than 1 0, its required return uhder the CAPM would be less than 5%. O d. If a stock's beta doubled, its required return under the CAPM would more than double. e. If a stock's beta were 1.0, its required return under the CAPM would be 5%