Problem 3 Here are some stocks with high and low betas, as reported by the Value Line Investment Survey: High Beta Stocks Company Intel Ford Motor Delta Airlines US Steel Beta 1.05 1.25 1.30 1.90 Low Beta Stocks Company Procter & Gamble Wal-Mart AT&T Pfizer Beta 0.65 0.70 0.75 0.90 Suppose that the risk-free rate is rf = 0.02 (2 percent) and that the expected return on the market portfolio is E(TM) = 0.08 (8 percent), then use the CAPM to calculate the expected returns on each of these eight stocks.

Here are some stocks with high and low betas, as reported by the Value Line Investment Survey: Suppose that the risk-free rate is rf=0.02 (2 percent) and that the expected return on the market portfolio is E(r~M)=0.08 ( 8 percent), then use the CAPM to calculate the expected returns on each of these eight stocks