Stock X has a 10% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 25% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%.

a. Which stock is riskier for a diversified investor?

b. Calculate 50/50 portfolios required rate of return and market rate .

c. Calculate the required return of a portfolio that has $7,500 invested in Stock X and

$2,500 invested in Stock Y.