Your are a finance executive given the job of discussing attractiveness of two acquisition targets.

1. Does portfolio of the two companies show lower standard deviation than individual stock company standard deviations?
2. Calculate the expected return using CAPM for each company.
3. What is the beta of the portfolio?
4. What is the expected return on the portfolio?

Please show your work.

3 N Below are the hypothetical average percentage returns for the two companies- Microsoft and Verizon MSFT Verizon Market 4 5 4 2 3 6 4 3 3 6 7 7 2 6 8 9 4 2 4 7 9 7 4 1 1 1 6 4 6 2 2 3 8 6 8 2 N 00 P 4 4 N 00 N w w 3 N Below are the hypothetical average percentage returns for the two companies- Microsoft and Verizon MSFT Verizon Market 4 5 4 2 3 6 4 3 3 6 7 7 2 6 8 9 4 2 4 7 9 7 4 1 1 1 6 4 6 2 2 3 8 6 8 2 N 00 P 4 4 N 00 N w w