Beta and CAPM A certain stock has a beta, $,$ of $1\mathrm{.}50.$ At this time, the risk$-$free rate, $R_F,$ is $3\%,$ and the expected return on the market portfolio, $r_m,$ is $10\%.$ You believe this stock will earn an $11\%$ return next year.

a$.$ If the return on the market portfolio were to increase by $10\%,$ what would you expect to happen to the stock's return? What if the market return were to decline by $10\%?$

b$.$ Use the capital asset pricing model $($CAPM$)$ to find the required return on this stock.

c$.$ Given your answer to part $b,$ would you recommend this stock? Why or why not?

d$.$ Assume that as a result of investors becoming less risk averse, the market return drops to $7\%,$ but the risk$-$free rate remains at $3\%.$ What effect would this change have on your responses in parts $b$ and $c?$

Please answer step by step so i can understand why