A.

Here are data on two companies. The T-bill rate is 6.0% and the market risk premium is 7.7%.

Company	$1 Discount Store	Everything $5
Forecast return	15%	14%
Standard deviation of returns	18%	20%
Beta	1.7	1

What would be the fair return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 decimal places.)

Company	Expected Return
$1 Discount Store	%
Everything $5	%

B.

Consider the following information:

Portfolio	Expected Return		Standard Deviation
Risk-free	7.0	%	0	%
Market	13.4		37
A	12.0		26

Calculate the Sharpe ratios for the market portfolio and portfolio A. (Round your answers to 2 decimal places.)

	Sharpe Ratio
Market portfolio
Portfolio A