1. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. An Indian company, Bajaj Auto, has a standard deviation of 50 percent but is uncorrelated with the market.

Calculate Bajaj Auto’s beta and expected return.

2. Suppose the risk-free rate is 3 percent, the expected return on the market portfolio is 13 percent, and its standard deviation is 23 percent. A German company, Mueller Metals, has a standard deviation of 50 percent and a correlation of 0.65 with the market. Calculate Mueller Metal’s beta and expected return.