16, Consider the following two stocks, A and B. Stock A has an expected return of 10% and a beta 1.20. Stock B has an expected return of 14% and a beta of 1.80. The expected market rate of return is 9% and the risk-free rate is 5%. Security would be considered a better buy because A. A, it offers an expected excess return of 0.2% B. A, it offers an expected excess return of 2.2% C. B, it offers an expected excess return of 1.8% D. B, it offers an expected return of 2.4% 17. The historical rate of return on stock A was regressed on the rate of return of stock M (the explanatory variable). The slope of the regression line was 0.8, the standard deviation of the residuals was 0.3 and the standard deviation of the rate of return of M was 0.2. deviation of the rate of return on A? What was the standard A. 0.460 B. 0.349 C. 0.286 D. None of the above 18. You are considering investing $10,000 in a combination of portfolio A and T-Bill. Portfolio A has a standard deviation of 20% per year, and an expected rate of want to be exposed to a standard deviation of 15% at most, and you want the highest expected return. How much would you invest in Portfolio A? A. $2,500 B. $7,500 C. $O D. more information is needed. You return exceeding the T-Bill rate