Exercises . Given an asset's beta, we can determine its expected return. Example. Suppose that CAPM holds. The expected market return is 14% and T bill rate is 5%. 1. What should be the expected return on a stock with B =0 ? 2. What should be the expected return on a stock with B =1 ? 3. What should be the expected return on a portfolio made up of 50% T-bills a 50% market portfolio? 4. What should be expected return on stock with = -0.6