Question: What is the volatility? I . Consider a world with only two risky assets, A and B and a risk free asset. Stock A has

What is the volatility?

I . Consider a world with only two risky assets, A and

I . Consider a world with only two risky assets, A and B and a risk free asset. Stock A has 200 shares outstanding, a price per share of $3.00, an expected return of 16% and a volatility of 30%. Stock B has 200 shares outstanding, a price per share of $4.00, an expected return of 10% 0.4. Assume CAPM and a volatility of 15%. The correlation coefficient between a and b is p = holds: a. What is expected return of the market portfolio?

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