Question: Problem 1 (31 marks): You have been provided with the following data about the securities of three firms, the market portfolio, and the risk-free asset:

Problem 1 (31 marks): You have been provided with the following data about the securities of three firms, the market portfolio, and the risk-free asset: a) Fill in the missing values in the table. Show your work. (19 marks) b) Is the stock of firm A correctly priced according to the CAPM? Firm B? Firm C ? If these securities are not correctly priced, what is your investment recommendation for someone with a well-diversified portfolio? (12 marks)

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