Use the following data: mean=expected return; stdev = standard deviation of returns; Sharpe = Sharpe ratio; capm = expected return based on the CAPM; market = market portfolio; rf = risk-free asset

asset	mean	stdev	beta	Sharpe	capm
A	16%	13%	1.25	0.92	16.5%
B	13%	11%	0.85	0.82	12.5%
C	8%	7%	0.60	0.57	10.0%
D	11%	11%	0.85	0.64	12.5%
E	18%	18%	1.45	0.78	18.5%
market	14%	10%
rf	4%

Based off the following data answer the following questions:

1. If you are a risk-averse investor with a well-diversified portfolio, which stock would you prefer the most?

2. If you are a risk-averse investor and wish to hold a single asset portfolio, which stock would you prefer the most?

3. Which stock is undervalued? [ A, B, C, D, E, F=none of the above ] Your choice is _________

4. Which stock is above the Capital Market Line? [ A, B, C, D, E, F=none of the above ] Your choice is _________.

5. The real return on market portfolio is 15%. What is range of the expected inflation rate based on the Fisher relation? You can use the exact or approximate Fisher relation.