The stock of Argo Inc. is expected to return 14% annually with a standard devi

    The stock of Argo Inc. is expected to return 14% annually with a standard deviation of 8%. The stock of Benford Inc. is expected to return 17% annually
    with a standard deviation of 12%. The beta of the Argo stock is 0.60 and the beta of the Benford stock is 1.2. The risk-free rate of return is expected to be
    9% but the return on the market portfolio is 16%. Based on the Security Market Line (SML) what is the required rate of return for Argo given the current market situation?

    17.10%
    15.30%
    13.20%
    16.40%

    Continued from Question 1 based on the security market line (SML) what is the required rate of return for Benford given the current market situation?

    18.40%
    17.40%
    15.10%
    11.60%

    Continued from Question 1 and Question 2 which one is a better buy in the current market? (HINT: You shall compare the expected returns of Argo and Benford
    given in the problem with their corresponding required rates of return you calculated in Question 1 and Question 2 respectively.)

    Benford
    is a better buy since the required rate of return is greater than the expected return.
    Argo is a better buy since the required rate of return is less than the expected
    return.
    Argo is
    a better buy since the required rate of return is greater than the expected return.
    Benford
    is a better buy since the required rate of return is less than the expected return.

    The expected return for Asset T is 20% and it has a standard deviation of 4%. The expected return for Asset S is 40% and it has a standard deviation of 7%.
    Which of the following is a CORRECT statement?

    Asset T is the less risky investment of the two investments.
    Asset S is the less risky investment of the two investments.

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