Capital asset pricing model

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1. If the return on stock A in year 1 was 3 %, in year 2 was -2 %, in year 3 was -2 % and in year 4 was -9 %, what was the standard deviation of returns for stock A over this four year period? (Round your answer to 1 decimal place and record without a percent sign. If your final answer is negative, place a minus sign before the number with no space between the sign and the number).

2. If the risk free rate is 4 %, the expected return on the market portfolio is 12% and the beta of Stock B is 0.9, what is the required rate of return for Stock B according to the Capital Asset Pricing Model (CAPM)? (Round your answer rounded to one decimal place and record without a percent sign).

Reference no: EM131697208

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