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Assume the CAPM holds. Consider the annual information in Table 2 . The annual risk - free rate of 2 % . The market standard

Assume the CAPM holds. Consider the annual information in Table 2. The annual risk-free rate of 2%. The market standard deviation is 15%.
Table 2
Stock A: Expected Return =7%, Standard deviation =50%
Stock B: Expected Return =5%, Standard deviation =40%
(a) Stock A is expected to pay no dividends for the next 3 years. In year 4, it is expected to pay $5 per year every year. Stock B is expected to pay a dividend of $2 next year growing at 1% per year. Compute the price of the 2 stocks today.
(b) Stock A has a beta of 1.2, what is the beta of stock B?
(c) What portfolio delivers the lowest possible standard deviation for an investor
who requires an expected return of 7%? What is the standard deviation of this
portfolio? Compare it with Stock As standard deviation.
(d) Compute the non-arbitrage price of a forward contract to deliver stock A in 2
years.
Please solve asap with correct answers.

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