1. Use the capital asset pricing model formula to determine the expected return on the stock of a company based in the U.S. and has a beta of 1.25. The current rates on U.S. Treasury bills are approximately 5% and the average return in the marketplace for similar stock has been averaging 4%.

2. The stock of Genco Products, Inc. has a current expected return of 12%. Treasury bills currently have rates of 3 % and the historic market rates for similar investments have been averaging 6%. What is the beta of Genco Products?

3. ABC Co. stock is currently expected to return 10%. ABC has a beta of 1.2, and similar investments are averaging 4% return in the market. What is the current risk free rate?