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I hope that the answers are complete to the questions and not be handwritten Mr. K created his own portfolio consisting of only firm XYZ

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Mr. K created his own portfolio consisting of only "firm XYZ" ( 100% weight). He has analyzed the one-year data in 2021, and found the followings: Mr. Ks portfolio: the average retum =2%,SD=30%. The market the average return =12%,SD=10% Risk free rate =4% XYZ 's beta =2.0 9. What is the (theoretically) expected return for the XYZ stock? A) 2% B) 12% C) 18% D) 20% 10. What is the (theoretically) reward-to-risk ratio for the XYZ stock? A) 4% B) 8% C) 12% D) We cannot know the answer from the given limited information 11. Mr. K has compared the theoretical expected return and the performance of his portfolio again. Then, he finds that there exists a significant difference between these (even he considers the potential statistical errors). Why is Mr. K's investment so different? A) Mr. K failed to choose an appropriate stock as his only one stock "XYZ" in his portfolio. B) We can say that the stock market was not efficient enough in 2021. 12. Mr. K wants to know whether he should buy or sell XYZ stock, by drawing the security market line (SML). What would be Mr. K's conclusion? A) XYZ stock is located below the SML; thus, he should buy since it is undervalued. B) XYZ stock is located below the SML; thus, he should sell since it is overvalued. C) XYZ stock is located above the SML; thus, he should buy since it is undervalued. D) XYZ stock is located above the SML; thus, he should sell since it is overvalued

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