Question: Stock A B C D Expected return 2% 8% 6% 8% Standard Deviation 8% 2% 4% 8% For a rational risk averse investor, we can

Stock	A	B	C	D
Expected return	2%	8%	6%	8%
Standard Deviation	8%	2%	4%	8%

For a rational risk averse investor, we can definitely say which of the following?

a)B preferred to C b) A is preferred t B c) C is preferred to D d) D is preferred to A

2) East gulf industries stock is one and one- half times as risky as the market on average. Given expected return on the market of 9% and a risk free rate of 1.5%, according to CAPM, what is the expected return for East Gulf Industries?

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