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how the A and B answers for standard deviation has used 1/2 square. And what is the meaning? because C answer has nothing with 1/2 square. Would you please provide the formula for standard deviation in this context?

1. The table provides data on two shares, anu , RENAULI.. F Expected Retum % Share A 18.0 Share B 10.0 Market Portfolio M 15.4 Risk-free Asset F 6.0 Correlation between the returns on A and B Standard Deviation (% 12.0 8.0 9.0 0 0.2 i) Calculate the expected returns and standard deviations for the following portfolios a) Portfolio X-20% in share A and 80% in share B b) Portfolio P-lend 70% in asset F and the remaining funds in portfolio M. c) Portfolio - borrow 30% in asset F and all the funds in portfolio M. ii) Plot the Capital Market Line, shares A and B and portfolios X, P and Q iii) Based on the CAPM: a) Calculate the beta coefficient for share A b) Calculate the roquired return on share B if its beta coefficient is 0.6. Is share B underpriced, overpriced or correctly priced according to the CAPM? c) Plot the Security Market Line and shares A and B. 2. Lecture 7. Tutorial Question 7. -100% than Return, Risk & Diversification Question 1 () (a) E(R) - (0.2) (18) + (0.8) (10) - 11.6% Joka Variance - (0.27 (12) + (0.872 (8) 20.2) (0.8) (0.2012) (8) = 52.864 Standard deviation - (52.864)2 = 7.27% (b) E(Rp) - (0.7) (6) + (0.3) (15.4) -8.82% Standard deviation -[(0.3(9) 12 - 2.70% (c) E(Ro) - (-0.3) (6)+(1.3) (15.4) - 18.22% Standard deviation - 11.70%

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