i need answers for c (ii) and c

Risk \& Return: Q=1.25;rf=2%; and RM=12%. Cash Flows: g=5% and is constant; the last dividend paid was D0=$2.00 If the current price of stock Q is P0=$22.105, find the actual rate of return on stock Q. Nor Q is a constant growth stock. (8 points) 22.105={2(1+0.05}/{k0.05}.5} 22.105=2.1/(k0.05)(k0.05) K=0.145=14.5% b. Find the equilibrium rate of return for stock Q. (6 points) E(R)=2+1.25(122)(122)=14.5% c. (i) Combine M and F so that its beta is identical to Q. Show the level of return. Call this combination portfolio P, (4 points) Call this combination portfolio P3 ( 4 points) (ii) Find the level of arbitrage retum from buying P and selling Q. ( 4 points) =2%+1.25(12%2%)=2%+12.5% 14.5%=cost/ retum percentage D1 =$2.00(1+0.05) D1 =$2.1 Price =2.1/0.1450.05 Price- 522.105 c. Is there a relationship between Jensen's Alpha and the arbitrage level of return? Explain. Note: Responding only yes or no is insufficient. (3 points) Risk \& Return: Q=1.25;rf=2%; and RM=12%. Cash Flows: g=5% and is constant; the last dividend paid was D0=$2.00 If the current price of stock Q is P0=$22.105, find the actual rate of return on stock Q. Nor Q is a constant growth stock. (8 points) 22.105={2(1+0.05}/{k0.05}.5} 22.105=2.1/(k0.05)(k0.05) K=0.145=14.5% b. Find the equilibrium rate of return for stock Q. (6 points) E(R)=2+1.25(122)(122)=14.5% c. (i) Combine M and F so that its beta is identical to Q. Show the level of return. Call this combination portfolio P, (4 points) Call this combination portfolio P3 ( 4 points) (ii) Find the level of arbitrage retum from buying P and selling Q. ( 4 points) =2%+1.25(12%2%)=2%+12.5% 14.5%=cost/ retum percentage D1 =$2.00(1+0.05) D1 =$2.1 Price =2.1/0.1450.05 Price- 522.105 c. Is there a relationship between Jensen's Alpha and the arbitrage level of return? Explain. Note: Responding only yes or no is insufficient. (3 points)