Investment

There are 5 observations of the rate of returns on stock S (denoted as R.) and of the market (R in the most recent years as follows: Year -10% 19% 8% 17% 21% -8% 15% 12% 18% 20% I. Find beta of the stock S 2. If the current risk free rate is 7%, the average risk free rate over these four years is 8%, find the expected rate of returns for S according to CAPM. 3. What is The geometric average of Rs and Rm