Page Page 1 of 34 Question 1 (2.5 points) According to the Capital Asset Pricing Model (i.e., CAPM), if Rf =risk free interest rate, Rm Expected return on the market portfolio, b beta, and E(Ra) = expected return on stock a: E(Ra) = Rf+ (Rm- Rf) E(Ra) Rf - b(Rm - Rf) E(Ra) bRf +(Rm - Rf) Rf + b(Rm - Rf) E(Ra) None of the above is a correct specification of the CAPM