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The risk-free rate is currently 2.6%, and the market ratum is 14.8%. Assume you are considering the following investments: a. Which Investment is most risky?

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The risk-free rate is currently 2.6%, and the market ratum is 14.8%. Assume you are considering the following investments: a. Which Investment is most risky? Least risky? b. Use the capital asset pricing model (CAPM) to find the required return on each of the investments c. Find the security market lino (SML), using your findings in part d. On the basis of your findings in parte, what relationship exists between risk and return? Explain. os 253 Fisk (beta) OS 15 Risk (beta) 25 Oc. OD Security marketing (SML) 30 Security market line (SML) 30 oo 25 25- 20- Required retum 15 10- 54 05 152 RIK os 152 d. On the basis of your findings in parte, what relationship exists between risk and return? (Select the best choice below) Data Table OA Risk and return are positively related as indicated by the slope of the SML OD Risk and returnare negatively related as indicated by the slope of the SML OC. It is hard to know risk and return are related by merely looking at the SML OD Risk and rolum are not related as indicated by the slope of the SML (Click on the icon here in order to copy its contents of the da a spreadsheet.) Investment Beta 1.44 0.94 0.75 0.04 2.12 Click to select your answert

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