You own a portfolio equally invested in stock X and stock Y. The market is expected to generate returns of 15% and the risk-free rate is 6% (a) Use the Capital Asset Pricing Model (CAPM) to calculate the required return of stock X and Y respectively. (6 marks) (b) Base on your answer in (a), determine whether stock X and stock Y are overvalued, undervalued or correctly valued respectively. Briefly explain. [Word limit: 50 words] (6 marks) (c) If you own a portfolio equally invested in stock X and stock Y, calculate the beta of the portfolio and state the key implication of your portfolio's beta. [word limit: 25 words] (4 marks) Question 2 Consider the following information: (a) Calculate the expected return for the two Stocks A and B respectively.(in \%) (4 marks) (b) Calculate the standard deviation for the two Stocks A and B respectively. (in \%) (6 marks) (c) If you have $200,000 to invest in a stock portfolio and your goal is to create a portfolio with an expected return of 9.924%. Based on your answer in part (a), how much money will you invest in Stock A and Stock B respectively? (6 marks) You own a portfolio equally invested in stock X and stock Y. The market is expected to generate returns of 15% and the risk-free rate is 6% (a) Use the Capital Asset Pricing Model (CAPM) to calculate the required return of stock X and Y respectively. (6 marks) (b) Base on your answer in (a), determine whether stock X and stock Y are overvalued, undervalued or correctly valued respectively. Briefly explain. [Word limit: 50 words] (6 marks) (c) If you own a portfolio equally invested in stock X and stock Y, calculate the beta of the portfolio and state the key implication of your portfolio's beta. [word limit: 25 words] (4 marks) Question 2 Consider the following information: (a) Calculate the expected return for the two Stocks A and B respectively.(in \%) (4 marks) (b) Calculate the standard deviation for the two Stocks A and B respectively. (in \%) (6 marks) (c) If you have $200,000 to invest in a stock portfolio and your goal is to create a portfolio with an expected return of 9.924%. Based on your answer in part (a), how much money will you invest in Stock A and Stock B respectively? (6 marks)