Problem 9-1 The market has an expected return of 11 percent, and the risk-free rate is 5%. Pfizer has a beta of 0.9. What is the required return for Pfizer?

Problem 9-4 The expected return for the market is 12%, and the risk-free rate is 8 percent. The following information is estimated for each of five stocks.

Stock	Beta	R(%)
1	0.9	12
2	1.3	13
3	0.5	11
4	1.1	12.5
5	1.0	12

a. Calculate the required return for each stock.

b. Assume that an investor, using fundamental analysis, develop the estimated returns, R, for these stocks. Based on the investors estimates, determine which stocks are undervalued and which are overvalued.

c. What is the market risk premium?