Question 2: Assume the following assets are correctly priced according to the Security Market Line. (4 Marks) E(R1 ) = 9.4%; B1 = 0.8 E(R2) = 13.4%; B2 = 1.3 a) Derive the Security Market Line b) Calculate the expected return of the market c) What is the expected return on an asset with a beta of 0.5 d) What is the expected price of that asset if the current price is 10 AED e) If the actual return of that asset is 15%, is that asset over/undervalued