3. Assume the CAPM holds. Consider the following data on two stocks, the market portfolio, and the risk-free rate: Stock X Stock Y Market Portfolio Risk Free Asset CAPM Expected Return ? 12% 4% Standard Deviation 41% 40% 22% 0% Beta 0.7 1.3 1.0 0.0 a. (3 points) Solve for the missing expected returns on stock X and stock Y. b. (3 points) You buy 4,000 shares of Stock X, which is trading at $30, and you buy 2,000 shares of Stock Y, which is trading at $15. What is the beta of this portfolio? c. (3 points) Based on your expected returns you calculated in part a, what is the expected return on your portfolio you constructed in part b? | d. (3 points) The standard deviation of your portfolio is 32% (you don't have to calculate or confirm this)? What other portfolio would definitely be superior to holding the portfolio you constructed of Stock X and Stock Y above