Problem 2. [10 pts). Consider the following data for two risk factors (1 and 2) and two securities (X and Y): 20=0.03 bx=0.80 21=0.02 bx2=1.45 22=0.07 byi=1.65 by2=2.35 Page 1 of 6 a. Compute the expected returns for both securities. b. Suppose that security Y is currently priced at $23.50, while the price of security X is prices at $15.50. Further, it is expected that both securities will pay a dividend of $1.20 during the coming year. What is the expected price for each security one year from now? (hint: you need to compute dividend yield for each asset and then you can compute expected price based on the expected capital gain) Problem 2. [10 pts). Consider the following data for two risk factors (1 and 2) and two securities (X and Y): 20=0.03 bx=0.80 21=0.02 bx2=1.45 22=0.07 byi=1.65 by2=2.35 Page 1 of 6 a. Compute the expected returns for both securities. b. Suppose that security Y is currently priced at $23.50, while the price of security X is prices at $15.50. Further, it is expected that both securities will pay a dividend of $1.20 during the coming year. What is the expected price for each security one year from now? (hint: you need to compute dividend yield for each asset and then you can compute expected price based on the expected capital gain)