1. Be able to explain how Basel III is likely to result in banks abandoning many of the riskier businesses in which they have engaged over the past two decades. How did ambiguity of capital standards encourage banks to engage in these activities.
2. You have invested in stocks W and X. From the following information: Expected Amount of Return Investment Beta Stock W 10% $100,000 1.40 Stock X 8% $300,000 0.80 a. What is the Beta? b. EXPLAIN in a sentence or two what your beta answer means to your porfolio.