QUESTION 3 We run regressions of the excess returns of the two portfolios (Value and Growth) on the market excess return and obtain the following results. The numbers in brackets are the t-statistics. Portfolio Intercept MKT R-squared Value 0.048 (2.54) 0.95 (16.65) 0.86 Growth -0.012 (3.10) 1.11 (20.42) 0.91 What is the value premium after controlling for CAPM? A. 0.048 B. 0.06 C. 0.16 OD.0.064 OE. 0.036 QUESTION 4 The risk-free rate and the expected market rate of return are 0.06 and 0.12, respectively. According to the capital asset pricing model (CAPM), the expected rate of return on security X with a beta of 1.5 is equal to A. 0.15 B. 0.12 C. 0.06 D.0.16 E. 0.14