QUESTION 3 In the CAPM world, two securities, A and B. are priced efficiently, i.e., they fall on the SML. The expected return of A is 20%, and its beta is 1.6. The expected return of B is 11%, and its beta is 0.7. The expected return of the market portfolio is_ and the risk free rate is __ A. 16% and 696 B. 14% and 496 C. 18% and 696 D. 15% and 596 E. 15% and 696 QUESTION 4 According to the mean-variance criterion, which one of the following investments dominates all others? A. E(r) = 0.10; Variance = 0.25 B.E(r) = 0.15: Variance = 0.20 C. E(T) = 0.15; Variance = 0.25 D.E(r) = 0.15; Variance = 0.22 E. E(T) = 0.10; Variance = 0.20