Question 1: Answer the following

a) ABC has a stock beta of 1.2, and the current inflation rate is 4%. The shares are trading at $32.30, and the market risk premium is 8%. If the t-bill rate is 3%, what is the expected return on ABC shares? Answer: 12.6%

b) Meta has a stock beta of 1.5, and the current inflation rate is 5%. The shares are trading at $98.00, and the average return on the stock market is 8%. If the t-bill rate is 3%, what is the expected return on Meta shares? Answer: 10.5%

c) ABC Limited has a stock beta of 1.2, and the average return on the stock market is 8%. If the t-bill rate is 2%, what is the expected return on ABC shares? Answer: 9.2%

Please include formulas and do not use excel