Q2. Risk, Return, and CAPM Walker Hotel must consider several investment projects A through C, using the CAPM model. Relevant information is presented in the following table. Rate of Return 5% 12% Beta 0 Item Risk-free rate Market portfolio Project A Project B Project C 1.5 0.75 2 a. Calculate the required return and risk premium for each Project, given its level of systematic risk. Risk Premium Rate of Return 5% 12% Beta 0 1 Item Risk-free rate Market portfolio Project A Project B Project C 1.5 0.75 2 b. Discuss the relative systematic risk of project A through C. c. Assume the recent market return to increase by 2%, to 14%. Calculate the new required returns for assets A through C. Compare your findings with Part a. What conclusions can you draw about the impact of a decline in investor risk aversion on the required returns of risks assets