Qu 7 a) i) What is the expected return on the market if the expected return on Asset A is 15%, the risk-free rate is 6% and Asset A has a beta of 0.9? Use the following information to answer parts ii) and iii) Security Return Standard Deviation Beta A 12% 16% 0.8 0.6 B 10% 7% Treasury Bills 7% ii) What is the risk premium for Security A? iii) If you were to form a portfolio consisting of 20% invested in Security A, 30% invested in Security B and the remainder in the risk-free rate, what would be the expected return on the portfolio? b) Welles Ltd wants to sell preference shares at $7 per share. A very similar issue of preference shares having similar risk characteristics already on issue has a price of $3 per share and offers a dividend of $0.15 every year. What dividend will Welles Ltd have to offer if the preference shares are going to sell