Suppose that the Treasury bill rate is 6% rather than 2%, as we assumed in Table 12.1, and the expected return on the market is 10%. Use the betas in that table to answer the following questions.

a. Calculate the expected return from Pfizer. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

Table 1.2

b. What is the highest expected return offered by one of these stocks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

c. What is the lowest expected return offered by one of these stocks? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

d. Would Ford offer a higher or lower expected return if the interest rate is 6% rather than 2%?

e. Would Walmart offer a higher or lower expected return if the interest rate is 6% rather than 2%?

U.S. Steel Disney Ford General Electric Monsanto Boelng Union Pacific Alphabet ExxonMobl Amazon Intel Pfizer Starbucks IBM McDonald's Coca-Cola Campbell Soup Walmart Newmont Mining PG&E Beta 1.85 1.42 1.31 1.20 1.19 1.01 1.00 0.96 0.94 0.93 0.91 0.90 0.79 0.59 0.51 0.49 0.47 0.26 0.24 0.23 Note: Betas are calculated from 5 years of monthly data