You're a financial analyst that evaluates stocks and then forms portfolios for clients. You found a stock that has a beta of 1.3 and an expected return of 13%. You also have the following data: Risk Premium on the Market Portfolio Standard Deviation of Market Portfolio Risk-Free Fate Standard Deviation of the Return on this Stock 7% 30% 5% 70% You are certain all your data is correct. Consider the following alternatives: A. Set the weight on this stock to some non-trivial positive value in which case portfolio returns will be affected by some of this stocks firm-specific risk. B. Set the weight on this stock to its weight in the market portfolio so that portfolio returns are not affected by any of this stocks firm-specific risk. C. Set the weight on this stock to a nontrivial negative value (short-sell the stock) even though this means that some of the stocks firm-specific risk will affect portfolio returns. Which of the above alternatives would you choose and give your reasoning? You're a financial analyst that evaluates stocks and then forms portfolios for clients. You found a stock that has a beta of 1.3 and an expected return of 13%. You also have the following data: Risk Premium on the Market Portfolio Standard Deviation of Market Portfolio Risk-Free Fate Standard Deviation of the Return on this Stock 7% 30% 5% 70% You are certain all your data is correct. Consider the following alternatives: A. Set the weight on this stock to some non-trivial positive value in which case portfolio returns will be affected by some of this stocks firm-specific risk. B. Set the weight on this stock to its weight in the market portfolio so that portfolio returns are not affected by any of this stocks firm-specific risk. C. Set the weight on this stock to a nontrivial negative value (short-sell the stock) even though this means that some of the stocks firm-specific risk will affect portfolio returns. Which of the above alternatives would you choose and give your reasoning