onsider the following information (Assume that Security M and Security N are in the same financial market):                            Standard Deviation                     Beta Security M             20%                                         1.25 Security N              30%                                        0.80 Which security should have higher expected return? Group of answer choices Security M Security N

Security A, standard deviation = 25% beta = 1.5 Security B, standard deviation = 40% beta = 1/3   If both securities have the same return, which should I invest in? Explain using knowledge of Capital Asset Pricing Model

The expected return and standard deviation of return of two risky securities is given below Expected Return Security A B 12% 16% Standard deviation 20% 30% Assets A and B are perfectly positively correlated and the risk-free rate is 10%. Find the optimal risky portfolio (1.e. weights for security A and B) and show it graphically? Ordinarily you would not be able to answer this question without tracing out the efficient frontier by solving the Markowitz model. However, since the assets are perfectly positively correlated, you don't need to solve the Markowitz model all combinations of A and B lie on a straight line between them. With that in mind consider what is the best you can do when you combine a riskless asset with the possible risky portfolios (that lie on the straight line) you face.

What is the expected return of a portfolio of two risky assets if the expected return E(Ri), standard deviation (SDi), covariance (COVij), and asset weight (Wi) are as shown below? Asset (A) E(R₂) = 25% SDA = 18% WA = 0.75 COVA, B = -0.0009 Select one: A. 13.65% B. 20 U ODN 20.0% C. 18.64% D. 22.5% Asset (B) E(R₂) = 15% SDB = 11% WB = 0.25