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How to solve g, h? Thank you! a. Calculate the expected return of each stock. b. Calculate the variance and standard deviation of each stock.

image text in transcribedHow to solve g, h? Thank you!

a. Calculate the expected return of each stock. b. Calculate the variance and standard deviation of each stock. c. Calculate the expected return of the portfolio (Portfolio1) consisting 40% of stock A, 40% of stock B and 20% of stock C. d. Calculate the variance and standard deviation of this portfolio. e. Consider an alternative portfolio (Portfolio2) 40% of stock A, 20% of stock B, 10% of stock C and 30% in the risk-free asset. Risk-free asset expected return is 2%. What is this portfolio's expected return, variance and standard deviation? f. Based on CAPM calculate each stock beta if market risk premium is 5%. g. Which stock has the lowest systematic risk? Which stock has the lowest total risk? Which stock is "safest"? Explain. What is the beta of the Portfolio1and Portfolio 2? a. Calculate the expected return of each stock. b. Calculate the variance and standard deviation of each stock. c. Calculate the expected return of the portfolio (Portfolio1) consisting 40% of stock A, 40% of stock B and 20% of stock C. d. Calculate the variance and standard deviation of this portfolio. e. Consider an alternative portfolio (Portfolio2) 40% of stock A, 20% of stock B, 10% of stock C and 30% in the risk-free asset. Risk-free asset expected return is 2%. What is this portfolio's expected return, variance and standard deviation? f. Based on CAPM calculate each stock beta if market risk premium is 5%. g. Which stock has the lowest systematic risk? Which stock has the lowest total risk? Which stock is "safest"? Explain. What is the beta of the Portfolio1and Portfolio 2

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