I don't understand the variables therefore, I can't continue with the problems given. I have uploaded my homework document.

Can you please give me the step by step breakdown leading to the answers for each question? I need to show work on how I got to the answer.

As for question number 1, what is the equation leading to the answer?

As for number 2, i know I would overweight Japan and underweight France but the italized text is asking me to compare it to the theoretical expected return suggested by the international CAPM and that's where I get lost. Then I know, I have to calculate an alpha for the US, France, and Japan.

For the alphas, the are telling me Japan has a 8.4% and France has an alpha of -4.4%.

What about the United States? How do I get those numbers?

As for number 3, I have to calculate its local "a" from the equation: E(Ri)=?Ro+Bi(E(Rl)-Ro)=A1

where E(Ri) and E(Rl) are the expected (forecasted) returns in local currency terms on company i and on the local market. R0 is the local risk-free rate, B?i is the beta of company i relative to its domestic (local) market, and ?i is the extra return due to an inefficient pricing in the local market, given the risk of the company.

we start from a passive benchmark such as the world index. Based on forecasts,

The local?s are given below:

United States

A: 2.6% B: ?0.8% C: 0%

France

D: 1.2% E: 0% F: ?0.1%

Japan

G: 0% H: 3.2% I: ?1.2%

How do i get to these numbers? Pleas help. It's due at midnight.