2. The following are estimates for two stocks. Stock Expected return Beta Firm-Specific

Stock	Expected Return	Beta	Firm-Specific Standard Deviation
A	14%	0.9	30%
B	21	1.4	42

The market index has a standard deviation of 20% and the risk-free rate is 7%.

a. What are the standard deviations of stocks A and B? (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Stock A _______??

Stock B _______??

Suppose that we were to construct a portfolio with proportions:

Stock A	0.30
Stock B	0.45
T Bills	0.25

Compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio. (Do not round intermediate calculations. Enter your answer for Beta in numbers, not in percentage. Round your answers to 2 decimal places. Omit the "%" sign in your response.)

Standard Deviation

Expected Return _______%??

Standard Deviation _______%??

Beta _______??

Nonsystematic standard deviation _______%??