You have been provided with the following data on the securities of two firms, the market portfolio, and the risk free asset. The market portfolio has an expected return of 10 percent, and a standard deviation of returns equal to 0.24. The risk free asset has a return of 3 percent.

PART A: Find the missing values in the table for the correlation of security A and the beta of security B (to 3 decimal places). *The correlation column for Security A and B are with the market portfolio.

Security	Estimated/Expected Return (%)	Standard Deviation	Correlation*	Beta
Firm A	14.9	0.38		1.35
Firm B	9.8	0.42	0.72

PART B: Determine the required returns expected for security A and B below.

Required return for security A, expressed as a percent to 2 decimal places. Do not enter the % sign

Required return for security B, expressed as a percent to 2 decimal places. Do not enter the % sign

PART C: Based on your analysis express your view on the valuation of Security A and B. Use the following terms: Over-valued, Under-valued, or Fairly-valued.

Security A is

Security B is