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You have been provided the following data on the securities of three firms, the market portfolio, and the risk-free asset: a. Fill in the missing values in the table. (Leave no cells blank - be certain to enter 0 wherever required. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Security	Expected Return	Standard Deviation	Correlation*	Beta
Firm A	.101	.32	_____	.84
Firm B	.141	_____	.51	1.39
Firm C	.161	.64	.36
The market portfolio	.12	.20	_____
The risk-free asset	.05	_____	_____

*With the market portfolio. b-1. According to the CAPM, what is the expected return of Firm A's stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return _____ b-2. What is your investment recommendation for someone with a well-diversified portfolio?

• ___Sell

• ___Buy

b-3. According to the CAPM, what is the expected return of Firm B's stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return _____ b-4. What is your investment recommendation for someone with a well-diversified portfolio?

• ___Sell

• ___Buy

b-5. According to the CAPM, what is the expected return of Firm C's stock? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Expected return _____ b-6. What is your investment recommendation for someone with a well-diversified portfolio?

• ____Buy

• ____Sell

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