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B. You are given the following two equations: {i} H; = HF +{HM HFlr' {ii} Fl = HF + {M15 FM You also have the

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B. You are given the following two equations: {i} H; = HF +{HM HFlr' {ii} Fl = HF + {M15 FM You also have the following information: .15 sm=.15 Rf= or\" Answer the following questions, assuming that the capital asset pricing model is correct: {a} Which equation would you use to determine the expected return on an individual security with a standard deviation of returns =.5 and a [1:213 Given the parameters above, what is the expected retum for that security? to} Which equation would you use to determine the expected return on a portfolio knowing that it is an efficient portfolio (consisting of the market portfolio M combined with the risk-free rate]? If you were told that the standard deviation of retums on that portfolio is equal to cm and you were given the above parameters, what is the expected return on that portfolio? {c} Can you determine the 13 of the portfolio in {h}? {d} Given your answer In to]. can you expand on what type of risky assets equation {I} can he used for? whet about the risky essets equation {ii} can he used for

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