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Mr. Moremi who works as an Analyst at Capital Securities, have been monitoring the performance of stocks of 3arclays, Sechaba, and Cresta and has compiled

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Mr. Moremi who works as an Analyst at Capital Securities, have been monitoring the performance of stocks of 3arclays, Sechaba, and Cresta and has compiled the following: a) The market's standard deviation is 18\%. Using the risk-free rate of 2.0% and an expected market return of 9.5%, what is the expected return of each stock? [9 marks] b) Based on your calculations in (a) describe the relationship between a firm's return and its beta. [2 marks]

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