Question 4 (30%) A. Discuss the assumptions of the mean-variance analysis. How restrictive are they? B. Define the Capital Asset Pricing Model. State and explain the assumptions of the model. C. You are given the following information regarding the stocks 1 and 2, the market portfolio and the risk-free asset: Securities Expected Return Standard Deviation Stock 1 Stock 2 Market Portfolio Risk-free asset 15.50% 9.20% 12% 5% Correlation coefficient with the market portfolio 0.9 0.8 1.0 0.0 20% 9% 12% 0% Calculate the beta coefficients for stocks 1 and 2 and comment on their magnitude