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Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for

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Suppose the yield on short-term government securities (perceived to be risk-free) is about 5%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 11.0%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Enter your answer as a percentage rounded to 1 decimal places.) b. What would be the expected return on a zero-beta stock? (Enter your answer as a percentage rounded to 1 decimal places.) Suppose you consider buying a share of stock at a price of $80. The stock is expected to pay a dividend of $10 next year and to sell then for $83. The stock risk has been evaluated at =0.5. c-1. Using the SML, calculate the fair rate of return for a stock with a =0.5. (Negative value should be indicated by a minus sign. Enter your answer as a percentage rounded to 2 decimal places.) c-2. Calculate your expected rate of return for the stock with a =0.5, using the expected price and dividend for next year. (Enter your answer as a percentage rounded to 2 decimal places.)

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