Suppose the expected rate of return of the market portfolio is 12% and the standard deviation of the rates of return is 25%. Assume the risk-free rate of return is 7%. Determine the equation of the capital market line and represent the equation graphically. Indicate the positions and coordinates of the risk-free and the market portfolio on the graph. Question 2 [3] Suppose the rates of return of a stock and the resources index are related by a single factor model. Information on the historical annual rates of return (in percentage) for the stock (r) and the index (f) over a period of 10 years is summarised below. Determine the factor loading and interpret the value given that k=110rk=150,k=110fk=67.4,k=110(rk2r)2=812.5,k=110(fkf)2=700andk=110(rkr)(fkf)=234.