Problem #4 (5 marks) You are considering the purchase of a stock priced at $100 per share. If you think the stock will rise to $117 per share by the end of the year, at which time it will pay a dividend of $1 per share, what beta would it need to have for this expectation to be consistent with the CAPM? Assume the risk-free rate is 4.5% and the market risk premium is 6%