$1-$ Here are data on two companies. The T$-$bill rate is $4\%$ and the market risk premium is $6\%.$

What would be the fair return for each company, according to the capital asset pricing model $($CAPM$)?($LO $7-1)$

$2-$ Characterize each company in the previous problem as underpriced, overpriced, or properly priced. $($LO $7-2)$

$3-$ What is the expected rate of return for a stock that has a beta of $1$ if the expected return on the market is $15\%?($LO $7-2)$

a$.15\%.$

b$.$ More than $15\%.$

c$.$ Cannot be determined without the risk$-$free rate.