Details The following questions are about risk-retum and applications. Provide a brief explanation for each question, no credit will be given without explanation. Type up and submit your answers here, do not attach any file. 1. Assume the risk-free rate is 5% and the S\&P 500 index return is 10%. AA stock's systematic rikk is represented by a beta of 1.2 . a. What is your required rate of return? b. If after investing in the stock, you earned 15% rate of return, was the stock overpriced or underpriced at the time of your purchase? 2. You have estimated the beta of BM stock at 1.60 . If you purchase the stock today and sell one year later, the rate of return you have is 18% while SEP 500 goes up 10\%. Do you overpay for the investment? 3. AA stock price is $45/ share. The stock is expected to pay dividends $2.50 in the coming year. After reviewing all information, you concluded the price one year from now will be $50/ share and you required a 10% rate of return for investing in this stock. What is the maximum price you are willing to pay today