1. After comparing the annual returns eamed on the stock market and those earned by common stockholders of various corporations over a series of prior years, Wall Street analysts have determined that the beta for Baja California Sunblock's common stock is 875. They expect the holders of "risk-free" short term US government bonds to earn a 3.75% average annual rate of retum, and expect the holders of Baja Californua common stock to earn a 10.5% average annual return, in future years. Based on the security market line (SML) equation, what average annual rate of retum would we expect investors to eam on the overall stock market in future years