(Required

rate of return using

CAPM)

a. Compute a fair rate of return for Intel common stock, which has a

1.3

beta. The risk-free rate is

5

percent, and the market portfolio (New York Stock Exchange stocks) has an expected return of

11

percent.

b. Why is the rate you computed a fair rate?

a. Using the CAPM, the fair rate of return for Intel common stock is

(Round to two decimal places.)