Question: 3. Based on information below, please answers the questions. It is assumed that the market return is 12.6% and yield of government bond is 4%.

3. Based on information below, please answers the questions. It is assumed that the market return is 12.6% and yield of government bond is 4%. 3.1. Calculate the significance of beta and 00/03 Resid -Std. Err.- Num. Ticker Close Std of of Adj. of Symbol Price Beta Alpha R-Sqr. Dev-N. Beta Alpha Beta Obs. AALA AmerAlia 2.250 -2.25 10.05 0.03 42.72 1.30 6.06 -1.15 60 AOL America Online 67.438 2.40 4.12 0.25 17.17 0.52 2.44 1.93 60 GNLK GeneLink 0.290 -7.74 16.15 0.44 37.30 2.10 9.92 -4.79 17 GM General Mtrs 82.813 1.01 -0.57 0.27 6.98 0.21 0.99 1.01 60 TSN Tyson Foods 11.125 1.13 -2.31 0.23 8.55 0.26 1.21 1.09 60 Ipha, total risk of each stock, and the correlation based on the single index model. Further, calculate the intercept if stated in total return according to market model. 3.2. According to CAPM, are the AALA stock and GNLK stock worth to buy? Explain. 3.3. Considering AOL stock, GM stock, and TSN stock, prove if there is an arbitrage opportunity

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