QUESTION 11 As a financial analyst, you are tasked with evaluating a capital budgeting project. You were instructed to use the IRR method and you need to determine an appropriate hurdle rate. The risk-free rate is 4 percent and the expected market rate of return is 12 percent. Your company has a beta of 1.2 and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be_ _%. A. 14 O B. 15.6 C. 12.5 D. 13.6 E. 14.6 QUESTION 12 Consider two risky securities A and B. A has an expected rate of return of 15% and a standard deviation of 20%. B has an expected rate of return of 10% and a standard deviation of 16%. The correlation coefficient of A and B is 0.2. Risk-free rate is 6%. The weights of A and B in the optimal risky portfolio are_ _and_ , respectively. A. 0.43; 0.57 B. 0.54; 0.46 C. 0.64; 0.36 D.0.52: 0.48 E. 0.67; 0.33