PROBLEM You hold a diversified portfolio of stocks and are considering investing in the XYZ Company. The firm's prospects look good and you estimate the following probability distribution of returns: Probability Returns 70% 20% 10% 15% 9% 20% The return on the market is 13.5% and the risk-free rate is 7%. You have calculated XYZ's beta from past returns as 1.3 and you believe this would be the future beta. a) What is the expected return from XYZ? b) What is the required rate of retum according to CAPM? c) Would you invest in the XYZ