Consider three stocks: Q, R and S.

		(%)	Dividend ($)	Stock Price ($)
Q	0.45	35	0.5	45
R	1.45	40	0	75
S	-0.20	40	1.0	20

Use a risk free rate of 2% and an expected market reryrn of 9.5%. The standard deviation of the market returns is 18%. Assume that the next dividend will be paid after one year, at t = 1. Q1: According to CAPM, what is the expected rate of return of each stock? Q2: What should today's price be for each stock, assuming CAPM is correct?