1. We are given that the risk free rate is 8% and the market return is 15%. We are also given the betas of three stock as follows:

Stock	Beta
Wipro	0.35
Reliance	1.17
Tata Motors	1.80

Further we are told that a research analyst at Motilal Oswal Financial Services has provided the following expectations for the above three stocks for the next year:

Stock	Current Price	Expected Price	Expected Dividend
Wipro	212	225	15
Reliance	1470	1600	40
Tata Motors	87	100	10

Based on the information provided calculate the expected returns for the three stocks using the CAPM model. Draw the Security Market Line (SML) and plot the above three stocks on the SML. Also compute the estimated returns for these three stocks based on the analyst information (from Motilal Oswal) and plot this on the SML graph. What actions would you take with regards to the above three stocks? (such as buy, sell, hold). Why? All calculations should be clearly shown to get the marks.