QUESTION 4 Assume you have two portfolios A & B and they have the same expected return and the individual stocks in the portfolio all have the same exact standard deviation across the two portfolios. But the key difference between the two stocks is that portfolio Stocks individually have lots of unsystematic risks but not much systematic risk. While portfolio B stocks individually have lots of systematic risk but not much unsystematic risk. Given what you know about diversification and assuming both are well diversified which is a better investment?

A. Portfolio A

B. Portfolios A and B are just as good as each other

c. You should invest in both

d. Portfolio B

QUESTION 5 If the market risk premium is 5% and a stock has a risk premium of 2% what must be the stock's Beta given the expected reward to risk ratio in the economy?(Please write your answer in decimal format, use at least 5 decimal places)