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part a can be calculated without using standard deviation Question B4 (a) The beta of a stock is 1.25, the risk-free rate is 3%, and

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part a can be calculated without using standard deviation
Question B4 (a) The beta of a stock is 1.25, the risk-free rate is 3%, and the expected return on the market is 15%. If the actual returns of the stock and the market are 15% and 12% respectively, calculate the systematic portion and unsystematic portion of the unexpected returns of the stock (4 marks) (b) Identify and explain briefly TWO disadvantages of Fama-French Three-Factor Model over Capital Asset Pricing Model (CAPM). (4 marks) Question B4 (a) The beta of a stock is 1.25, the risk-free rate is 3%, and the expected return on the market is 15%. If the actual returns of the stock and the market are 15% and 12% respectively, calculate the systematic portion and unsystematic portion of the unexpected returns of the stock (4 marks) (b) Identify and explain briefly TWO disadvantages of Fama-French Three-Factor Model over Capital Asset Pricing Model (CAPM). (4 marks)

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