= 15%. 4. Consider a single-index model economy. The index portfolio M has E(R) = 6%, M An individual asset 1 has an estimate of 0.04 using the single index model = 1.5 and = R = + R +. The forecast of asset 1's return is E(r) = 15%. rf = 4%. Total: 30 marks. (a) According to asset 1's return forecast, calculate a. (5 marks)