Question 9 (1 point)

Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stocks returns is 20%. The stocks returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. Portfolio P consists of 50% X and 50% Y. Given this information, which of the following statements is correct?

Question 9 options:

	Portfolio P has the same required return as the market (rM).
	Portfolio P has a beta of 1.0 and a required return that is equal to the riskless rate, rRF.
	The required return on Portfolio P is equal to the market risk premium (rM rRF).
	Portfolio P has a beta of 0.7.