#C is wrong

Figure 12.11 shows plots of monthly rates of return on three stocks versus the stock market index. The beta and standard deviation of each stock is given beside its plot. a. Which stock is safest for a diversified investor? Ford Pfizer Walmart b. Which stock is safest for an undiversified investor who puts all her funds in one of these stocks? Ford Pfizer Walmart c. Consider a portfolio with equal investments in each stock. What would this portfolio's beta have been? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 1.31 Beta d. Consider a well-diversified portfolio made up of stocks with the same beta as Ford. What are the beta and standard deviation of this portfolio's return? The standard deviation of the market portfolio's return is 20%. (Do not round intermediate calculations. Round your beta answer to 2 decimal places. Enter your standard deviation answer as a percent rounded to 1 decimal place.) 0.90 Beta Standard deviation e. what is the expected rate of return on each stock? Use the capital asset pricing model with a market risk premium of 8%. The risk- free rate of interest is 4%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected Rate of Return Ford Pfizer Walmart Figure 12.11 shows plots of monthly rates of return on three stocks versus the stock market index. The beta and standard deviation of each stock is given beside its plot. a. Which stock is safest for a diversified investor? Ford Pfizer Walmart b. Which stock is safest for an undiversified investor who puts all her funds in one of these stocks? Ford Pfizer Walmart c. Consider a portfolio with equal investments in each stock. What would this portfolio's beta have been? (Do not round intermediate calculations. Round your answer to 2 decimal places.) 1.31 Beta d. Consider a well-diversified portfolio made up of stocks with the same beta as Ford. What are the beta and standard deviation of this portfolio's return? The standard deviation of the market portfolio's return is 20%. (Do not round intermediate calculations. Round your beta answer to 2 decimal places. Enter your standard deviation answer as a percent rounded to 1 decimal place.) 0.90 Beta Standard deviation e. what is the expected rate of return on each stock? Use the capital asset pricing model with a market risk premium of 8%. The risk- free rate of interest is 4%. (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Expected Rate of Return Ford Pfizer Walmart