You have been provided the following data on the securities of three firms, the market portfolio, and the risk-free asset:

a.Fill in the missing values in the table.(Leave no cells blank - be certain to enter 0 wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

SECURITY EXPECTED RETURN STANDARD DEV. CORRELATION BETA

FIRM A .115 .26 ______ .91

FIRM B .135 _______ .45 1.46

FIRM C .116 .71 .30 _______

THE MARKET PORTFOLIO .12 .20 _______ ________

THE RISK FREE ASSET .05 ________ ________ ________

*With the market portfolio.

b-1.According to the CAPM, what is theexpected return of Firm A's stock?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

b-2.What is your investment recommendation for someone with a well-diversified portfolio?

• Sell
• Buy

b-3.According to the CAPM, what is the expected return of Firm B's stock?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

b-4.What is your investment recommendation for someone with a well-diversified portfolio?

BuySell

b-5.According to the CAPM, what is theexpected return of Firm C's stock?(Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Expected return

b-6.What is your investment recommendation for someone with a well-diversified portfolio?

BuySell