Month	ABC Corp.	Market
1	6%	4%
2	3%	2%
3	-1%	1%
4	-3%	-2%
5	5%	2%
6	0%	2%

3.

a. If ABCs beta is 1.54, and the risk-free rate is 4%, what would be an appropriate required return for an investor owning ABC Corp.? (Note: Because the returns of ABC Corporation are based on monthly data, you will need to annualize the returns to make them compatible with the risk-free rate. For simplicity, you can convert from monthly to yearly returns by multiplying the average monthly returns by )

b. How does ABCs historical average return compare with the return you believe to be appropriate, given the firms systematic risk?