QUESTION (20 Marks) Consider three stocks: Q. R and S. Heus STD (annual) Forecast for Nov 2009 Dividend Stock Price 35% $0.50 SAS 1.45 40% $75 $ -0.20 40% $1.00 $20 Use a risk-free rate of 2.0% and an expected market return of 9.5%. The market's standard deviation is 18%. Assume that the next dividend will be paid after one year, at : " I. Required : a) According to the CAPM. what is the expected rate of return of cach stock? (10 Marks) b) What should today's price be for cach stock, assuming the CAPM is correct? (10 Marks)