b) Stock Y has an expected return of 25% and a beta of 1.25. Using the data provided in (a) and your previous calculations, work out whether Y is priced fairly according to the CAPM. If not, what should its expected return be and how can one build a portfolio of the market and risk-free asset that has that same expected return. Justify your answers and illustrate them via a plot of the security market line. [5 marks] b) Stock Y has an expected return of 25% and a beta of 1.25. Using the data provided in (a) and your previous calculations, work out whether Y is priced fairly according to the CAPM. If not, what should its expected return be and how can one build a portfolio of the market and risk-free asset that has that same expected return. Justify your answers and illustrate them via a plot of the security market line. [5 marks]