The expected return and standard deviation of the market portfolio are 8% and 12%, respectively. The expected

Question:

The and standard deviation of the market are 8% and 12%, respectively. The of security A is 6%. The standard deviation of security B is 18%, and its specific risk is (10%)2. A that invests 1/3 of its value in A and 2/3 in B has a beta of 1. What are the risk-free rate and the of B according to the CAPM?
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these... Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...