1. Consider the following data: Stock A 2.50% 3.00% 1.50% 5.00% Stock B 0.00% 2.00% -2.00% 1.00% a. Compute the average return and volatility of stock A and B Stock A=2.4%, b. Compute the portfolio returns for stock A and B given a 25% weight in stock A C. Compute the average return and volatility of the portfolio returns from stepb. d. Compute the correlation between the stock returns of A and B e. Use the portfolio weights, the volatilities of stock A and B, and the correlations from step d. compute the portfolio volatility 2. Considera stock with beta equal to 1.5, a risk-free rate of 3%, and a market return of 10%. What is the expected return of the stock using CAPM? 3. We have 10 stocks with the same standard deviation of 20%. Assume CAPM market beta captures all undiversifiable risk. a. Ifall 10 stocks all have zero market beta, what is the standard deviation of an equally-weighted portfolio of these 10 stocks? b. If all 10 stocks all have a market beta of 1, what is the standard deviation of an equally weighted portfolio of these 10 stocks? 1. Consider the following data: Stock A 2.50% 3.00% 1.50% 5.00% Stock B 0.00% 2.00% -2.00% 1.00% a. Compute the average return and volatility of stock A and B Stock A=2.4%, b. Compute the portfolio returns for stock A and B given a 25% weight in stock A C. Compute the average return and volatility of the portfolio returns from stepb. d. Compute the correlation between the stock returns of A and B e. Use the portfolio weights, the volatilities of stock A and B, and the correlations from step d. compute the portfolio volatility 2. Considera stock with beta equal to 1.5, a risk-free rate of 3%, and a market return of 10%. What is the expected return of the stock using CAPM? 3. We have 10 stocks with the same standard deviation of 20%. Assume CAPM market beta captures all undiversifiable risk. a. Ifall 10 stocks all have zero market beta, what is the standard deviation of an equally-weighted portfolio of these 10 stocks? b. If all 10 stocks all have a market beta of 1, what is the standard deviation of an equally weighted portfolio of these 10 stocks