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.