Problem 7-04 Based on five years of monthly data, you derive the following information for the companies listed: Company ai giriM (Intercept) Intel 0.20 11.00% 0.65 Ford 0.10 15.50 0.39 Anheuser 0.20 8.80 0.57 Busch Merck 0.04 11.60 0.68 S&P 5000.00 4.50 1.00 a. Compute the beta coefficient for each stock. Do not round intermediate calculations. Round your answers to three decimal places. Intel: Ford: Anheuser Busch: Merck: b. Assuming a risk-free rate of 8 percent and an expected return for the market portfolio of 14 percent, compute the expected (required) return for all the stocks. Do not round intermediate calculations. Round your answers to two decimal places. Intel: % Ford: % Anheuser Busch: Merck: % % c. Choose the correct SML graph for the following estimated returns for the next year. Intel 19 percent Ford 14 percent Anheuser Busch 18 percent Merck 10 percent The correct graph is -Select- . A. 20 de det Security market Line Which stocks are undervalued or overvalued? Company Evaluation Intel -Select- Ford -Select- - Anheuser -Select- Busch Merck -Select- Problem 7-04 Based on five years of monthly data, you derive the following information for the companies listed: Company ai giriM (Intercept) Intel 0.20 11.00% 0.65 Ford 0.10 15.50 0.39 Anheuser 0.20 8.80 0.57 Busch Merck 0.04 11.60 0.68 S&P 5000.00 4.50 1.00 a. Compute the beta coefficient for each stock. Do not round intermediate calculations. Round your answers to three decimal places. Intel: Ford: Anheuser Busch: Merck: b. Assuming a risk-free rate of 8 percent and an expected return for the market portfolio of 14 percent, compute the expected (required) return for all the stocks. Do not round intermediate calculations. Round your answers to two decimal places. Intel: % Ford: % Anheuser Busch: Merck: % % c. Choose the correct SML graph for the following estimated returns for the next year. Intel 19 percent Ford 14 percent Anheuser Busch 18 percent Merck 10 percent The correct graph is -Select- . A. 20 de det Security market Line Which stocks are undervalued or overvalued? Company Evaluation Intel -Select- Ford -Select- - Anheuser -Select- Busch Merck -Select