In an economy, the risk free rate is 3%, and the market index return is 6%. When stock As beta is estimated as 1.2,

1. What is the required return of this stock based on CAPM?
   1. 6%
   2. 6.6%
   3. 9%
   4. 10.2%
2. When the expected return on this stock is 8% in the market, what should the analyst report be?

1. Hold
2. Buy
3. Sell