Q. 2. Risk free return is at 5% and expected return of market portfolio is 16%. Find out the expected returns of the securities with a beta of (a) 1.25 (b) .8 and (c) 1?

Q. 3. Current dividend per share is Rs 5, growth expected during the next three years is 15 % p.a., thereafter, for three years, the dividend are expected to grow at the rate of 10% per annum and then the dividends are likely to grow at a constant rate of 7 % p.a., If an investor expects a return of 20% p.a., find out what is the value of these shares for this investor.

Q. 4. Give risk free return 6% and return on market portfolio is 18%.Draw SML. Let us take hypothetical value of beta as 0, .5, 1, 1.5 and 2.