QUESTION TWO Suppose the market premium is 9%, market volatility is 30% and the risk-free rate is 3% (8 Marks) A. Draw the Security Market Line (SML) B. Stock X and Y have the following parameters Beta (B) Beginning Value Dividend Value End Value 0.6 K20 K2 K21 1.2 K10 K1 K10 Calculate the returns according to the Capital Asset Pricing Model (CAPM) utilising the market return you plotted in part A. (2 Marks) Calculate the returns according to the values given in the above parameters (2 Marks) III. Plot stocks X and Y on the SML in part A. clearly indicating the return calculated in parts l. and ll (4 Marks) QUESTION TWO Suppose the market premium is 9%, market volatility is 30% and the risk-free rate is 3% (8 Marks) A. Draw the Security Market Line (SML) B. Stock X and Y have the following parameters Beta (B) Beginning Value Dividend Value End Value 0.6 K20 K2 K21 1.2 K10 K1 K10 Calculate the returns according to the Capital Asset Pricing Model (CAPM) utilising the market return you plotted in part A. (2 Marks) Calculate the returns according to the values given in the above parameters (2 Marks) III. Plot stocks X and Y on the SML in part A. clearly indicating the return calculated in parts l. and ll (4 Marks)