Compute a fair rate of return for Intel common$$ stock, which has a $1\mathrm{.}4$ beta. The$$ risk$-$free rate is $6$percent$,$ and the market portfolio$($New York Stock Exchange$$ stocks$)$ has an expected return of $12$ percent.

b$.$ Why is the rate you computed a fair$$ rate?

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Part $1$

a$.$ Using the$$ CAPM, the fair rate of return for Intel common stock is

$$

enter your response here$\%.($Round to two decimal$$ places.$)$

Part $2$

b$.$ Why is the rate you computed in part $($a$)$ a fair$$ rate?$($Select the best choice$$ below.$)$

A$.$

The computed $14\mathrm{.}40\%$ is a fair rate because it compensates the investor for the time value of money and for assuming risk.

B$.$

The computed $14\mathrm{.}40\%$ is a fair rate because it does not compensate the investor for the time value of money and for assuming risk.