Christopher Buxton is an analyst for Hanns G Investments and has been tasked with making recommendations to a key client with regards to investment opportunities the clients are considering. They have provided the following information: Name E(Return) BETA Next Plc 8% 1.05 ITV 15% 1.20 Smith Group 10% 1.55 Tate & Lyle 11% 0.95 The return on a Government Bond at 3% and the FTSE 100 index rose from 7023 to 7687 in the last 12 months. Requirement: a) Explain the difference between Expected return and Required return b) Calculate and graphically display the SML c) For each of the four investment opportunities listed above calculate and display graphically whether they are under- or over- priced d) Explain the difference between the Capital Asset Pricing Model, Arbitrage Theory (Ross, 1976) and Fama & French's Three-Factor Christopher Buxton is an analyst for Hanns G Investments and has been tasked with making recommendations to a key client with regards to investment opportunities the clients are considering. They have provided the following information: Name E(Return) BETA Next Plc 8% 1.05 ITV 15% 1.20 Smith Group 10% 1.55 Tate & Lyle 11% 0.95 The return on a Government Bond at 3% and the FTSE 100 index rose from 7023 to 7687 in the last 12 months. Requirement: a) Explain the difference between Expected return and Required return b) Calculate and graphically display the SML c) For each of the four investment opportunities listed above calculate and display graphically whether they are under- or over- priced d) Explain the difference between the Capital Asset Pricing Model, Arbitrage Theory (Ross, 1976) and Fama & French's Three-Factor