An analyst has provided you with the following information about the common shares of two companies.

Common Shares Hot Ltd Cold Ltd

Required rate of return $11\%10\%$

Risk free rate of return $3\mathrm{.}5\%3\mathrm{.}5\%$

Standard deviation of return $18\%15\%$

Market risk premium $7\%7\%$

Beta $0\mathrm{.}91\mathrm{.}3$

a$)$ Calculate the expected return for each company using the capital asset pricing model. $($Use $4$ decimal places$)(6$ marks$)$

b$)$ Using the information about the companies provided above, along with your calculation in part a$)$ Indicate whether a well$-$diversified investor would prefer to invest in the shares of Hot Ltd$.$ or the shares of Cold Ltd$.$ Explain why. $(4$ marks$)$