Stock A has a beta of 0.80, stock B has a beta of 1.40, and stock C has a beta of -0.30.
1) Rank these stock from the riskiest to the least risky. Explain your reasoning and back up your explanation with research.
2) If the return on the market portfolio increases by 12%, what change in the return for each of the stocks would you expect? Explain your answer.
3) If the return on the market portfolio declines by 5%, what change in the return for each of the stocks would you expect? Explain your answer.
4) If you felt the stock market was about to experience a significant decline, which stock would you be most likely to add to your portfolio? Why?
5) If you anticipated a major stock market rally, which stock would you be most likely to add to your portfolio? Why?
Response must be detailed please, at least a paragraph per question.