a. You expect an RFR of 9 percent and the market return (RM) of 14 percent. Compute the expected return for the following stocks. Round your answers to two decimal places. Stock Beta E(R) U 0.90 % N 1.45 % D -0.25 % Choose the correct SML graph. The correct graph is -Select- A. Security market Line 6703 0.18 0.16 SM 014 0:12 . D 01 . 0.00 0.04 0:02 02 0.2 12 1.4 Bets B. Security market Line EAST 010 0:16 N SME 0.14 2012 0.1 . D 0.00 06 0.01 02 C. Security market Line 010 SML 0:14 DI 0 0 D 0.024 0504 03 02 04 06 0.0 D. Security market Line 010 016 SU 0.14 012 ON STO D 0.00 004 002 0.00 06 0 U b. You ask a stockbroker what the firm's research department expects for these three stocks. The broker responds with the information below. Indicate what actions you would take with regard to these stocks. Round your answers to two decimal places. Stock Current Expected Expected Estimated Evaluation Price Price Dividend Return 30 32 0.80 % -Select- N 1.85 % -Select- D 40 1.15 % -Select- If you believe the appropriateness of these estimated returns, you would buy -Select- and sell -Select- o Choose the correct SML graph. Note that labels with asterisk denote estimated returns. The correct graph is -Select- HP Q Search th The broker responds with the information below. Indicate what actions you would take w regard to these stocks. Round your answers to two decimal places. Stock Current Expected Expected Estimated Evaluation Price Price Dividend Return U 30 32 0.80 % -Select- N 41 43 1.85 % -Select- D 40 44 1.15 % -Select- If you believe the appropriateness of these estimated returns, you would buy -Select- and sell -Select- Choose the correct SML graph. Note that labels with asterisk denote estimated returns. The correct graph is -Select- A Security market Line 0.101 0.16 SNE 0.14 1 012 . D 01 -0.0 0:00 0.00 0.02 0664 09 02 03 14 Be Security market Line B. 010 SME 019 011 .2 000 0.06 0.00 0.02 -0.6 -0.4 -0,2 02 0.4 0.6 0.8 2 Beta c. Security market Line ERIT 0:10 0.16 N U SML . 0.14 0 LH : 03 01 U . . D 0.08 0.05 000 0.024 -0.6044 -0.2 0.2 0.4 0.6 08 14 Bets D. Security market Line ER 0:10 SML 0.16 R 0.14 *D 0.121 0.00 . D "N 0.064 0.04 0.02 0.604 02 0.2 0.4 0.6 0.8 Beta