Stock A has a beta of 0.82, stock B has a beta of 1.41, and stock C has a beta of 0.28.

a. Rank these stocks from the most risky to the least risky.

b. If the return on the market portfolio increases by 11.4%, what change in the return for each of the stocks would you expect?

c. If the return on the market portfolio declines by 4.7%, what change in the return for each of the stocks would you expect?

d. If you felt the stock market was about to experience a significant decline, which stock would you be most likely to add to your portfolio? Why?

e. If you anticipated a major stock market rally, which stock would you be most likely to add to your portfolio? Why?