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12.5% O 15.8% 17.2% Question 4 The expected returns for Stocks A, B, C, D, and E are 7 percent, 10 percent, 12 percent, 25

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12.5% O 15.8% 17.2% Question 4 The expected returns for Stocks A, B, C, D, and E are 7 percent, 10 percent, 12 percent, 25 percent, and 18 percent, respectively. The corresponding standard deviations for these stocks are 12 percent, 18 percent, 15 percent, 23 percent, and 15 percent, respectively. Which one of the securities should a risk-averse investor purchase if the investment will be held in isolation (by itself? oc OD 5 pts Question 5 The market portfolio contains only unsystematic risk, therefore the market risk premium represents the return that investors require to be compensated for al amount of relevant or systematis, risk

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