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Q6 Assume CAPM holds. The market portfolio has an expected return of 10 percent and a standard deviation of 25 percent. Stock A has an

Assume CAPM holds. The market portfolio has an expected return of 10 percent and a standard deviation of 25 percent. Stock A has an expected return of 7 percent, a beta of 0.60, and a standard deviation of 50 percent. Stock B has a beta of 1.3.

a) What is the expected return of stock B?

b) What is the standard deviation of stock B?

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