RiskSwan's Sportswear plans to launch a line of designer jeans with the help of onewelll-known designer. Because of the highly competitive nature of theindustry, the line of jeans has been given a codename, Stretch.Swan's market research has established a forecast shown in the following table.

Market acceptance Probability Annual rate of return

Very poor 0.08 0.016

Poor 0.15 0.041

Average 0.53 0.073

Good 0.19 0.117

Excellent 0.05 0.242

1. Use the table to calculate the average return for the line.

The average return for the line is .....? %. (Enter as a percentage and round to two decimalplaces.)

no2.

Capital asset pricing model(CAPM)For the asset shown in the followingtable, use the capital asset pricing model to find the required return.(Click on the icon here in order to copy the contents of the data table below into aspreadsheet.)

Risk-free

rate, RF Market return, rm Beta, b

10% 18% 0.8

The required return for the asset is ...???%. (Round to two decimalplaces.)