Question: please answer part 2 only Intro You've analyzed IBM's stock and expect it to deliver a return of 9% over the next year. The stock

please answer part 2 only please answer part 2 only Intro You've analyzed IBM's stock and expect

Intro You've analyzed IBM's stock and expect it to deliver a return of 9% over the next year. The stock has a beta of 0.6 . The risk-free rate is 2.5% and the expected market risk premium is 4.5%. Part 1 Attempt 2/10 for 9.5 pts. What is the security's expected alpha? Correct Note that the market risk premium of 4.5% is net of the risk-free rate, by definition of a risk premium: E(r)CAPM=rf+(E(rM)rf)=0.025+0.60.045=0.052=E(r)mecurityunalysisE(r)CAPM=0.090.052=0.038 Part 2 Attempt 1/10 for 10 pts. What is the security's expected alpha in equilibrium according to the CAPM

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