A firm's stock has a beta of 1.5, the expected market risk Premium is 6%, risk-free rate is at 3%. According to CAPM, what should be the stock's required rate of return? 7.5% 12% 10.5% 14% There are only 2 states of the world: boom or bust, with equal probabilities (50% and 50%). You are evaluating 4 stocks, all with expected return of O. Which one of the following has highest volatility (standard deviation)? Stock B returns 5% in boom, and -5% in bust Stock D returns 20% in boom, and -20% in bust Stock A returns 10% in boom, and -10% in bust Stock C returns 15% in boom, and -15% in bust There are only 2 states of the world: boom or bust, with equal probabilities (50% and 50%). You are evaluating 4 stocks. Which one of the following has highest expected return? Stock D returns 20% in boom, and -5% in bust Stock B returns 15% in boom, and -5% in bust Stock C returns 5% in boom, and -15% in bust Stock A returns 10% in boom, and -10% in bust