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1. Nexus Manufacturing (NFX) has a beta of 2.5 and an expected return of 20%. The risk- free rate is 1% and the market risk

1. Nexus Manufacturing (NFX) has a beta of 2.5 and an expected return of 20%. The risk- free rate is 1% and the market risk premium is 7%. You believe the CAPM holds.What is your trading startegy ?Why?

2. Your friend John declares to you one nightt that he made $4000 by investing in stocks last year.Jhon is a proud of his achivement,.Brifely, What are three questions you would ask john before agreeing that he should be proud of how his stock investemts performed last year?Explain

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