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The risk-free rate is currently 3%, and the market return is 10%. Assume you are consid- ering the following investments. G4 P524 Investment Beta 1.5

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The risk-free rate is currently 3%, and the market return is 10%. Assume you are consid- ering the following investments. G4 P524 Investment Beta 1.5 1.0 0.75 0.0 2.0 a. Which investment is most risky? Least risky? b. Use the capital asset pricing model to find the required return on each of the investments. c. Using your findings in part b, draw the security market line, d. On the basis of your findings in parr c, what relationship exists between risk and return? Explain

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