1. Suppose you observe the following situation. Current Value Cooley, Inc. $45 Moyer Co. $94 S&P500 index 250 T-Bills $95.24 Expected Value Next Year $53.10 $108.10 285 $100 Beta 1.5 0.9 1.0 0 a) Calculate the expected rate of return on Cooley's and Moyer's common stocks. What is the expected rate of return on the market portfolio (S&P500 index)? What is the risk-free rate of interest? b) Given the beta of Cooley and Moyer, what are the required rates of return on these stocks? c) Are these two stocks correctly priced? If not what should be their current prices