Please show your work and no excel please!

Problem 7-25 Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 9.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) Expected rate of return b. What would be the expected return on a zero-beta stock? Expected rate of return Suppose you consider buying a share of stock at a price of $95. The stock is expected to pay a dividend of $8 next year and to sell then for $98. The stock risk has been evaluated at B= -0.5. c.1. Using the SML, calculate the fair rate of return for a stock with a B -05 (Round your answer to 1 decimal place.) Fale rate of return c-2. Calculate the expected rate of return, using the expected price and dividend for next year. (Round your answer to 2 decimal b. What would be the expected return on a zero-beta stock? Expected rate of return Suppose you consider buying a share of stock at a price of $95. The stock is expected to pay a dividend of $8 next year and to sell then for $98. The stock risk has been evaluated at B=-0.5. c-1. Using the SML, calculate the fair rate of return for a stock with a = -0.5. (Round your answer to 1 decimal place.) Fair rate of return c-2. Calculate the expected rate of retum, using the expected price and dividend for next year. (Round your answer to 2 decimal places.) Expected rate of return c-3. Is the stock overpriced or underpriced? Underpriced Overpriced