13. Stock X has a standard deviation of return of 10% Stock Y has correlation coefficient between Y, what is the standard deviation of your portfolio? A, 10% B. 12.2% C.14% D. 20% E. I 5% a standard deviation of return of 20%. The these stocks is 0.5. If you invest 60% of the funds in stock X and 40% in stock 14. The amount of systematic risk present in a particular risky asset relative to that in an average risky asset is called the: A. risk premium. B. beta coefficient. C. standard deviation. D mean. E. variance. 15. There are two expected states of the economy. The probability of a normal economy is 60 percent and the probability of a recession is 40 percent. If the economy is normal, Security A is expected to earn 15 percent Security B is expected to earn 8 percent. If the economy goes i percent and Security B is expected to earn 18 percent. What is the expected return on a portfolio that is equally divided among stock A, stock B, and a risk free asset? The expected return on the risk-free asset is 4 percent regardless of the state of the economy. A. 8.97 percent B. 9.00 percent C. 10.11 percent D. 11.82 percent and into a recession, Security A is expected to earn 5 E. 13.88 percent 16. The market risk premium is 9 percent and the risk-free rate is 3 percent. According to CAPM, what is the expected return on a stock with a beta of .7? A. 6.3 percent B. 7.2 percent C. 7.7 percent D. 8.3 percent E. 9.3 percent