1. Stock A has an expected return of 12% with a standard deviation of 4%, while stock B has an expected return of 10% with a standard deviation of 9%. Determine which stock you are going to pick using mean and standard deviation rule.

Depends on your risk tolerance

Pick B

Depends on how much money you are going to invest

Pick A

2. Stock A has a beta of 1.14, The T-bill rate is 3.6%, and the return on market portfolio is 11.6%. The required rate of return on Stock A is

13.53%

12.10%

15.50%

12.72%

10%