Question: finance question: does anyone know how to solve the folkowing problem step-by-step ? thank you so much! 7. Suppose you work for an investment firm.

finance question: does anyone know how to solve the folkowing problem step-by-step ? thank you so much!
finance question: does anyone know how to solve the folkowing problem step-by-step

7. Suppose you work for an investment firm. Your team's expectations are for the market index to return 12% in the coming year. Currently the one-year Treasury bill rate is 0.40%, which you view as riskless. Your most recent responsibility at the firm has been to perform a valuation analysis on FUV stock. Your beta estimate for FUV is 1.25. (a) Assuming that you believe the current price of FUV is a fair valuation, calculate your Arm's expected return for FUV in the coming year. Report your answer as a percentage rounded to two decimal places. (b) Assuming that you believe FUV is overvalued by 3%, calculate your firm's expected return for FUV in the coming year. Report your answer as a percentage rounded to two decimal places (c) Let's return to the assumption of fair valuation. If the index realizes a return of -5.0% for the year and FUV realizes a return of -6.0%, did FUV perform as the CAPM expected, outperform the CAPM, or underperform the CAPM? Explain

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