CAN YOU HELL ME STEP BY STEP PLEASE. CAPM and Expected Return. Suppose that the Treasury bill rate is $6\%$ rather than the $1\%$ value assumed in Table $12\mathrm{.}2($from the page $376$ of the textbook$).$ Use the betas in Table $12\mathrm{.}2$ to answer the following questions. $($LO$12-2)$

TABLE $12\mathrm{.}2$ Expected rates of return demanded by investors for selected companies. Expected return is calculated assuming a risk$-$free rate of $1\%$ and a market risk premium of $7\%.$

$\backslash$table$[[$Ticker$,$Company,Beta,Expected Return $(\%)],[$X$,$U$.$S$.$ Steel,$3\mathrm{.}03,22\mathrm{.}2],[$MRO$,$Marathon Oil,$2\mathrm{.}35,17\mathrm{.}4],[$AMZN$,$Amazon,$1\mathrm{.}51,1\mathrm{.}5],[$IBM$,$IBM,$1\mathrm{.}33,1\mathrm{.}3],[$BA$,$Boeing,$1\mathrm{.}19,9\mathrm{.}3],[$F$,$Ford,$1\mathrm{.}09,8\mathrm{.}6],[$UNP$,$Union Pacific,$1\mathrm{.}07,8\mathrm{.}5],[$GOOG$,$Google$/$Alphabet$,1\mathrm{.}01,8\mathrm{.}1],[$DIS$,$Disney,$1\mathrm{.}00,8\mathrm{.}0],[$XOM$,$ExxonMobil,$1\mathrm{.}00,8\mathrm{.}0],[$INTC$,$Intel,$0\mathrm{.}91,7\mathrm{.}3],[$PFE$,$Pfizer,$0\mathrm{.}65,5\mathrm{.}6],[$PCG$,$Pacific Gas & Electric,$0\mathrm{.}55,4\mathrm{.}9],[$SBUX$,$Starbucks,$0\mathrm{.}51,4\mathrm{.}5],[$MCD$,$McDonald's,$0\mathrm{.}45,4\mathrm{.}1],[$CPB$,$Campbell Soup,$0\mathrm{.}43,4\mathrm{.}0],[$KO$,$Coca$-$Cola,$0\mathrm{.}43,4\mathrm{.}0],[$WMT$,$Walmart,$0\mathrm{.}35,3\mathrm{.}5],[$NEM$,$Newmont Mining,$-0\mathrm{.}01,0\mathrm{.}9],[$Average$,,0\mathrm{.}99,7\mathrm{.}94]]$

Note: Expected return $=1\%+$ beta $7\%.$

a$.$ Given the assumed risk premium of $7\%,$ how does this change your estimate of the expected rate of return on the market portfolio?

b$.$ Using your answer to part $($a$),$ calculate the expected return on the stocks in Table $12\mathrm{.}2.$

c$.$ Suppose instead that you continued to assume that the expected return on the market remained at $8\%$ Now what would be the expected return on each stock?

d$.$ Compare your expected returns in part $($c$)$ to those in Table $12\mathrm{.}2.$ Which stocks have a higher expected return? Which lower? If you neglect to adjust the forecast of the market return to the change in the risk$-$free rate, how are your estimates of expected return likely to be biased?