You have researched the risk and return to the NASDAQ markets, comparing these with the overall U.S. stock markets and the world stock markets. Not surprisingly, NASDAQ is riskier than the overall U.S. stock market. But is it riskier than world markets?

Your statistics determine the following:

Correlation Coefficients

	Nasdaq	USA	World	SD(%)
Nasdaq	1	0.9	0.75	22.0%	???
USA		1	0.85	15.0%	16
World			1	12.5%	21

And the world risk-free interest rate is 2.0%

But in order to use International CAPM, you need to calculate Beta_World for the NASDAQ market. Your calculations determine Beta_world is __________

And using this information, you calculate the expected return () is __________

Select one:

a. Beta_world 1.3 and 27.1%

b. Beta_world 2.8 and 17.2%

c. Beta_world 1.7 and 17.1%

d. Beta_world 1.7 and 20.1%

e. None of the above.