5. Astock has a hea of 1.15, the expected return on the market is 11 percent, and the risk-free rate is 3.6 percent What must the expected return on this stock he? Answer: 6. Suppose the rate of return on long-term government securities (perceived to be riskless) is about 6% and the expected rate of return required by the investors of a stock is 15%. According to the Capital Asset Pricing Model, what is the expected rate of return on the market portfolio if the beta of the stock is 1.21? Answer: 7. You are choosing a portfolio from a market index fund and risk-free asset. The risk-free rate is 6%, the expected return on the market index fund is 14%, and its standard deviation is 20%. If you choose a portfolio with an expected return of 10.8%, what is its standard deviation? Answer: The Ramiyah Corporation has a weighted average cost of capital Cignoring taxes) of 12%. It can borrow 8%. Assuming that Ramiyah has a target capital structure of 80% equity and 20% debt, what is the cost of equity