Question: a) [10 marks] Determine which stock, under the CAPM framework, has a higher systematic risk. *For full credit, you must show the steps/calculation toward your

a) [10 marks] Determine which stock, under the CAPM framework, has

a) [10 marks] Determine which stock, under the CAPM framework, has a higher systematic risk. *For full credit, you must show the steps/calculation toward your results. b) [10 marks] Suppose the market risk premium (not the return on the market portfolio) is 5%. The risk-free return is equal to 6%. Calculate the CAPM predicted returns on Apple and Bay Exploration, respectively. *For full credit, you must show the steps/calculation toward your results

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