We consider two risky assets A and B that are on the Capital Market Line. The numerical values for the two assets are: The expected returns are: la = : E[fa] = 12% and MB = E[B] = 20% The volatilities are: 0A = 3% and ob = 5% We also know the expected return of the market portfolio is um = 16%. Questions: 1. What is the return in excess of the risk-free rate on the market? 2. What is the volatility of the market return? 3. What is the Security Market Line? Compute the betas of the two risky assets. We consider two risky assets A and B that are on the Capital Market Line. The numerical values for the two assets are: The expected returns are: la = : E[fa] = 12% and MB = E[B] = 20% The volatilities are: 0A = 3% and ob = 5% We also know the expected return of the market portfolio is um = 16%. Questions: 1. What is the return in excess of the risk-free rate on the market? 2. What is the volatility of the market return? 3. What is the Security Market Line? Compute the betas of the two risky assets