Problem: The following are the historic returns for the LGM Company: Year 1 2 3 LGM 16 -5 7 SP500 14 2 4 al Compute the beta of the stock LGM b/ Suppose that the risk-free rate is 4%, and the expected return for the market is 13%, what is the expected return of the stock LGM? c/ Plot the following estimated returns for the next year on the SML and indicate which stocks are undervalued or overvalued. LGM 10% Question: Draw a graph that shows the Markowitz efficient frontier and the line from RFR to the tangent of this efficient frontier but this time the rate of borrowing is different from the rate of lending, and show as an example, an utility curve U1 of an investor 1 who invests in the risk free rate asset and the portfolio M described above, and an utility curve U2 of an investor 2 who wants a higher return than the portfolio M without borrowing and finally an utility curve U3 of an investor 3 who wants to borrow to get higher return than portfolio M