Risk & return is a classic item in finance. You would like to estimate what the return on General Electric stock could be given it's beta of 1.68. Other data you have collected: the rate of return on 90 day T-Bills is 2%, on 5 year T-Notes it 3% and on the "long bond", the 30-year T- Bond = 5.5%. The Prime is 7%, LIBOR is 6.5% and the average return on the overall stock market is estimated to be 12%.

OK again, what do you expect the rate of return on G.E.'s stock to be?