(a) Suppose Stock X has a beta of 2.2 and Stock Y has a beta of 0.8. The risk-free interest rate is 3% and the market risk premium is 7%. You are going to invest in a portfolio that consists of 70% Stock X and 30% Stock Y. What is the expected return of your portfolio according to CAPM? (3 marks) (b) Suppose you sold Stock Z for $56 after receiving dividend of $2 per share. You originally purchased Stock Z for $50. The stock beta has been evaluated at 0.9. Based on the risk-free interest rate and market risk premium in (a), does Stock Z lie on/above/below SML graphically if CAPM is applied? Briefly explain