Problem 10 (8 marks Stock A has a beta of 1.75 and an expected return of 15%. Stock B has a beta of 2.78 and an expected return of 23%. Assume that the market is in equilibrium (i.e., all assets in the economy are correctly priced). Compute the risk-free and the expected return on the market portfolio. Problem 11 (8 marks The market price of a stock is $50. It's expected rate of return in 14%. The risk-free rate is 6% and the market risk premium is 8.5%. What will be the market price of the security if its covariance with the market portfolio doubles (and all other variables remain unchanged). Assume zero growth and the stock is correctly priced. 14/4 View as Text