Consider the information below for portfolios M, F, X, Y and Z.Portfolio M represents the market portfolio.F is the risk-free security.Portfolios X, Y and Z can be thought of as individual securities or portfolios of securities.

Portfolio

Expected Return

Std. Deviation

Beta

M (market)

10.0%

20.0%

?

F (risk-free)

4.0%

0.0%

?

X

6.0%

30.0%

?

Y

8.0%

40.0%

?

Z

14.0%

40.0%

?

a) Draw the Capital Market Line (CML) and the Security Market Line (SML) for the data described above - assuming CAPM holds.Be sure to place values and labels on the axes and label points M, F, X, Y, and Z.

b) Stocks Y and Z are equally risky since they have the same standard deviation.True or False?Why