ou (0.1 Q2: A stock has a beta of 1.2 and the standard deviation of its returns is 25%. The market risk premium is 5% and the risk-free rate is 4%. a. What is the expected return for the stock? 0.06 =Rf+B(MP) b. What are the expected return and standard deviation for a portfolio that is equally invested in the stock and the risk-free asset? --> 0.04 + 1.2 (0.05) c. A financial analyst forecasts a return of 12% for the stock. Would you buy it? Why or why not? C. B