$(3$ points$)$ You analyze Stock ABC and forecast a $12\%$ rate of return and compute a beta of $1.$ You analyze Stock DEF and forecast a $13\%$ rate of return and compute a beta of $1\mathrm{.}50.$ The market's expected return is $11\%$ and the risk$-$free rate is $5\%.$ According to the capital asset pricing model $($CAPM$),$ which stock is a better buy? Hint: Compare your forecast to the expected CAPM results.

$(3$ points$)$ According to CAPM, what is a stock's expected rate of return if it has a beta of $1\mathrm{.}25,$ the market risk premium is $8\%,$ and the risk$-$free rate is $3\%?$ Round to the nearest $0\mathrm{.}01\%.$