a) Calculate the expected return, variance, standard deviation and coefficient of variation for the returns of both Linko and the S&P/TSX index.

b) Calculate the covariance and correlation coefficient between the returns of Linko and the S&P/TSX index.

c) If the current yield on 3 month Government of Canada Treasury Bills is 1.1%, calculate the market premium for risk.

d) What is the forecast beta coefficient for Linko?

e) Given the foregoing information, what is Linkos required rate of return according to the CAPM?

f) Is Linkos stock over or under priced? Explain.

The following are forecasts for possible returns in 2017 for both Linko Limited (a publicly-traded Canadian company and the Total Return S&P/TSX 60 Composite Index. Table 1.1 Forecasts for Linko and s 60 Total Return Index Possible Possible HPRs for Returns for the Possible Economic State Probabilit Linko S&P/TSX Index Severe Recession 5.0% 28.0% 20.0% -4.0% 3.0% Recession 10.0% 70.0% 12.0% Normal 10.0% 10.0% 18.0% Expansion 22.0% 48.0% Economic Boom 5.0% 22.0%