You have a portfolio P that consists of 50% Stock X and 50% Stock Y. Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stock's returns is 20%. The stocks' returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. Given this information, which of the following statements is CORRECT?
A) the required return on portfolio p is equal to the market risk premium (rm- rrf).
B) portfolio p has a beta of 0.7.
C) portfolio p has a beta of 1.0 and a required return that is equal to the riskless rate, rrf.
D) portfolio p has the same required return as the market (rm).
E) portfolio p has a standard deviation of 20%.

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The Answer of You have a portfolio P that consists of 50% Stock X and 50% Stock Y. Stock X has a beta of 0.7 and Stock Y has a beta of 1.3. The standard deviation of each stock's returns is 20%. The stocks' returns are independent of each other, i.e., the correlation coefficient, r, between them is zero. Given this information, which of the following statements is CORRECT?
A) the required return on portfolio p is equal to the market risk premium (rm- rrf).
B) portfolio p has a beta of 0.7.
C) portfolio p has a beta of 1.0 and a required return that is equal to the riskless rate, rrf.
D) portfolio p has the same required return as the market (rm).
E) portfolio p has a standard deviation of 20%.

You Have a Portfolio P That Consists of 50% Stock