Question 3 (9 points) (1) Two investment advisers are comparing performance. Adviser A averaged a 20% retum with a portfolio beta of 1.5, and adviser B averaged a 15% return with a portfolio beta of 1.2. If the T- bill rate was590 and the market return during the period was 13%, which adviser was the better stock picker? (2) Consider the following SML based on the CAPM Return 15% SML 10% 2 Beta What is the expected return for a portfolio with a beta of 0.5 (3) A share of stock sells for $50 today. It will pay a dividend of S6 per share at the end of the year. Its beta is 1.2. What do investors expect the stock to sell for at the end of the year? Assuming that the risk-free rate is 6% and the expected rate of return on the market is 16%