Q1 a. what is Sharpe ration? Show the link between sharpe ratio and best efficient portfolio b. what is capital asset pricing model? Derive the risk premium when beta is between 0 and 1 c. calculate union pacific cost of equity from the CAMP using its own beta (0.90) estimate and the industry beta (1.25) estimate. How different are your answers. Assume a risk free rate of 2% and a market risk premium of 7%. Can you be confident that Union pacifics true beta is not the industry average?