Answer : B) 0.24 and 0.48
explanation: beta of stock 1 = correlation (i,m) × std deviation of i / std deviation of m
= 0.3 × 0.4 / √0.25
= 0.12/0.5
= 0.24
Beta of stock 2 = correlation (i,m) × std deviation of i / std deviation of m
= 0.8 × 0.3 /√0.25
= 0.24 / 0.5
= 0.48
7. The expected return and variance of re- turns of the market is m = 0.11 and oi = 0.25, respectively. The risk-fr...