QUESTION TWO / Stock A comprises of a Beta (B) coefficient of 1.4 and a required rate of return of 25%. Stock B comprises of a Beta (B) coefficient of 0.7 and a required rate of return of 14%. A. Assuming that the Capital Asset Pricing Model (CAPM) assumptions hold true, compute Risk-Free Rate (RFR) and the Market Return (12 Marks) B. Given the market variance of 0.36 calculate: 1. The correlation between stock A and the market (4 Marks) II. The correlation between stock B and the market (4 Marks) MATIT [TOTAL: 20 MARKS] QUESTION TWO / Stock A comprises of a Beta (B) coefficient of 1.4 and a required rate of return of 25%. Stock B comprises of a Beta (B) coefficient of 0.7 and a required rate of return of 14%. A. Assuming that the Capital Asset Pricing Model (CAPM) assumptions hold true, compute Risk-Free Rate (RFR) and the Market Return (12 Marks) B. Given the market variance of 0.36 calculate: 1. The correlation between stock A and the market (4 Marks) II. The correlation between stock B and the market (4 Marks) MATIT [TOTAL: 20 MARKS]