Suppose that all the unrealistic assumptions of the CAPM are true $($the CAPM is valid$)!!!$ The

market portfolio has an expected return equal to $15\%$ and the risk free rate is $5\%.$ We are mainly

interested in $2$ securities in the market; stocks A and B$.$ The beta of stock A is $1\mathrm{.}8$ and the expected

return of stock B is $10\%.$

$1.$ Estimate the expected return of stock A$.$

$2.$ Estimate the beta of stock B$.$

$3.$ Estimate the expected return of the optimal risky portfolio.

$4.$ Estimate the alpha of stock A$.$

$5.$ Estimate the expected return and the beta of an equally weighted portfolio Z consisting of

stocks A and B$.$

$6.$ Estimate the alpha of portfolio Z$.$