Shows betas and standard deviations for four stocks

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The following table shows betas and standard deviations for four stocks. 

Company Beta Standard deviation

IBM 1.1 20%

Ford 1.15 30%

Dairy Queen 0.95 40%

Walmart 0.75 35%

Which stock has the highest systematic risk?

Assume that the risk free rate is 4% and the market risk premium is 12%. You discover that stock ABC has a beta of 0. According to the capital asset pricing model (CAPM), what should be ABC's expected rate of return?

Reference no: EM131676288

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