3. Suppose you observe the following situation: Security Breaux Mart, Inc. Lakeside Co. Beta 1.8 1.6 Expected Return 22% 20.44% If the risk-free rate is 7%, are these securities correctly priced? What would the risk-free rate have to be if they are correctly priced? 4. Suppose the risk-free rate is 8%. The expected return on the market is 16%. If a particular stock has a beta of 0.7, what is its expected return based on the CAPM? If another stock has an expected return of 24%, what must its beta be