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You have reviewed the characteristics and historical prices of two companies (A and B) that your company is considered to invest, and have estimated their

You have reviewed the characteristics and historical prices of two companies (A and B) that your company is considered to invest, and have estimated their relations to the wider market, detailed below: Date Share Price A Share Price B 2019 $4.12 $22.96 2020 $5.36 $21.63 2021 $5.24 $26.72 2022 $5.65 $32.68 Company A Company B Beta 0.8 1.6 Growth in dividends 5% 7% Other information: Current risk-free rate of return: 5% p.a. Current return on market portfolio: 12% p.a. REQUIRED: a) Calculate the expected return and standard deviation for share A and B. b) Calculate the required return for share A and B, given their risk characteristics

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