Assume you used 2-years of historical monthly data to estimate the alpha and beta. Assume the regression results indicate that the alpha is .15 and the beta is 1.2. Assume that the E[Rm]= 6% and the risk-free rate is 2% what is the expected excess IBM return?

19.8%

22.2%

Can't answer because you don't know the value of e.

4.8%

7.2%