(A). An industrial firm has a beta of 1.1. Based on historical data you estimate the market risk premium to be 8.5% and the current risk-free rate is 3%. Using the CAPM, what is the expected return on the stock for this industrial firm?

(B). You estimate that the expected return on a retailing firms stock is 10%. Based on historical data you estimate the market risk premium to be 5% and the current risk-free rate is 5%. What is its beta?