Question: The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the capital asset pricing model to answer the

The Treasury bill rate is 4%, and the expected return on

The Treasury bill rate is 4%, and the expected return on the market portfolio is 12%. Using the capital asset pricing model to answer the following questions. [17 marks) a) What is the required return on stock X with a beta of 1.5? [4 marks] b) If the market expects a return of 13.2% from stock Y, what is its beta? [4 marks] c) What is the beta return on a portfolio that is equally invested in stock X and stock Y? [4 marks] d) Discuss the differences between the capital market line and the security market line. (5 marks]

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