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Stocks A and B had the following returns: What was the standard deviation of each stock? Y ear Stock A Stock B 1 9% 6%

Stocks A and B had the following returns:

What was the standard deviation of each stock?

Y ear

Stock A

Stock B

1

9%

6%

2

12%

8%

3

-4%

-1%

4

1%

5%

A.

Stock A: 0.073, Stock B: 0.039;

B.

Stock A: 0.037, Stock B: 0.039;

C.

Stock A: 0.073, Stock B: 0.052;

D.

Stock A: 0.073, Stock B: 0.073;

You have learned that the beta of A is 1.3 while the beta of B is 0.5. The risk-free rate is 3%.What are the required rate of returns (RRR) of A and B if the expected return to the market is 10%?(hint: CAMP formula)

A.

Stock A: 12.1%, Stock: 6.5%;

B.

Stock A: 16%, Stock: 8%;

C.

Stock A: 16%, Stock: 6.5%;

D.

Stock A: 13%, Stock: 8%;

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