5. Based on five years of monthly data, you derive the following information for the compa- nies listed: Company a; (Intercept) rim Intel 0.22 12.10% 0.72 Ford 0.10 14.60 0.33 Anheuser 0.17 7.60 0.55 Merck 0.05 10.20 .60 S&P 500 0.00 5.50 1.00 a. Compute the beta coefficient for each stock. b. Assuming a risk-free rate of 8 percent and an expected return for the market portfolio of 15 percent, compute the expected (required) return for all the stocks and plot them on the SML. c. Plot the following estimated returns for the next year on the SML and indicate which stocks are undervalued or overvalued. Intel-20 percent . Ford-15 percent Anheuser Busch-19 percent Merck-10 percent 6. The following are the historic returns for the Chelle Computer Company: Year Chelle Computer General Index 37 15 9 13 -11 14 -9 11 12 Based on this information, compute the following: a. The correlation coefficient between Chelle Computer and the General Index. b. The standard deviation for the company and the index. c. The beta for the Chelle Computer Company. 7. The following information describes the expected return and risk relationship for the stocks of two of WAH's competitors. Expected Return Standard Deviation Beta Return Stock X 12.0% 20% 1.3 Stock Y 9.0 15 0.7 Market Index 10.0 12 1.0 Risk-free rate 5.0 Using only the data shown in the preceding table: a. Draw and label a graph showing the security market line, and position Stocks X and Y relative to it. b. Compute the alphas both for Stock X and for Stock Y. Show your work. c. Assume that the risk-free rate increases to 7 percent, with the other data in the preced ing matrix remaining unchanged. Select the stock providing the higher expected risk