Question 3: The beta of a stock is 1.2 and standard deviation of its return is 15%. The S.D of the market portfolio is 10% and expected market return is 12%. Risk free rate is 5%. Calculate (Marks-10) i. Market risk premium. Risk premium of the stock. iii. Expected return on the stock. iv. Abnormal return of the stock (if any) if the actual average return on this stock is 13%. v. Unsystematic risk of the stock