B2. Assume that the CAPM is correct and the betas of securities X and Y are 0.8 and 1.2, respectively. The expected returns for these securities are 15% and 20%. This implies that the riskfree rate is closest to: a) 5.0%. b) 10.0%. c) 12.5%. d) 15.0%. B3. Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%. Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down. Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down. Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down. The expected return on a security with a beta of 0 is closest to: a) -4.0% b) 0.0% c) 3.2% d) 4.0%