Suppose the assumptions behind the Capital Asset Pricing Model hold. The risk-free rate is 2 and the expected market return is 9%. The standard deviation of the market portfolio is 15%. A stock has a beta of 1.4 and a standard deviation of 35%.

a.) what is the expected return of the stock?

b.) What fraction of the total risk is idiosyncratic?

c.) The standard deviation of your optimal portfolio is 18%. What is it's expected return?