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2. Assume that the historical average rate of return on the market index is 12% and the Treasury Bill rate is 3%. Beta of Stock Jis 1.5. a) Assuming the CAPM holds, what is expected return on stock J if the current Treasury bill rate is 1% b) Assume the current share price of stock J is $20. Analysts made recommendations and price estimates for stock J as follows. Recommendation One-year price targets Number of Analysts Strong Buy 25 4 Buy 23 3 Hold 20.5 1 Sell 18 Strong Sell 15 Using the analysts forecast, determine expected rate of return on Stock J. c) Describe the advantages and disadvantages of using history and using analyst forecast to make predictions