1. The following data have been developed for a listed company, Happy Cat. The YTM on risk-free Treasury Bills is 4\% and is expected to remain at this point for the foreseeable future. a. Calculate the sample variance of the market return. Show your calculations. Correct your answers to 4 decimal places. [4 marks] b. Find the sample covariance between the return for Happy Cat and the market. Show your calculations. Correct your answers to 6 decimal places. [ 4 marks] c. Calculate the beta of Happy Cat. Show your calculations. [2 marks] d. Use the CAPM to find the required rate of return of Happy Cat. [3 marks] e. If Happy Cat distributes $2 annual dividend in one year and the annual dividend is assumed to grow at 4% per year indefinitely, find the fair stock price of Happy Cat now. Show your workings. [3 marks] f. Suppose Steven buys 5,000 shares of Happy Cat at the fair stock price now. If the market drops by 1.5% in one month, estimate the dollar amount of capital gain or loss for his investment in one month. Explain your answer. [4 marks]