Exercise 3. A. In the table are data on two companies. The T-bill rate is 4% and teh market risk premium is 6%. What would be the fair return for each company, according to the capital asset pricing model? Company Swift Co. Locke Co. Forecasted Return 12% 11% Std Dev of Returns 8% 10% Beta 1.5 1.0 B. In a CAPM world, is the following scenario possible in equilibrium? Explain why or why not. Portfolio Expected Return Std. Dev. Risk-free 10% Market 18% 24% Stock B 16% 12% 0 Exercise 3. A. In the table are data on two companies. The T-bill rate is 4% and teh market risk premium is 6%. What would be the fair return for each company, according to the capital asset pricing model? Company Swift Co. Locke Co. Forecasted Return 12% 11% Std Dev of Returns 8% 10% Beta 1.5 1.0 B. In a CAPM world, is the following scenario possible in equilibrium? Explain why or why not. Portfolio Expected Return Std. Dev. Risk-free 10% Market 18% 24% Stock B 16% 12% 0