REVIEW HELP PLEASE

Write down steps leading to your answer so you can get partial credits. Only giving a one-number answer is not acceptable. Round your final answer to one decimal place if you use percentage, or three decimal places if you don't use percentage (e.g. 20.5%, or 0.205). (1) In the CAPM world, an individual risky asset A has the following characteristics: E(ra) = 12%, BA = 2, and the risk-free rate is 2%. What is the expected market return E(TM) in this economy? (4 points) (2) Suppose in a hypothetical economy, there exist two financial assets A and B, and their returns are perfectly negative correlated with PAB = -1. The following information is also given: E(TA) = 8%, E(T) = 2%, A = 15%, OB = 9%. What is the equilibrium risk- free rate in this economy? (6 points)