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Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. 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 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1is 70%. According to the capital asset pricing model: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) Expected rate of return b. What would be the expected return on a zero-beta stock? Expected rate of return % Suppose you consider buying a share of stock at a price of $50, The stock is expected to pay a dividend of $5 next year and to sell then for $52. The stock risk has been evaluated at B--0.5. 1. Using the SML, calculate the fair rate of return for a stock with a B -0.5. (Round your answer to 1 decimal place.) Fair rate of return c-2. Calculate the expected rate of return, using the expected price and dividend for next year. (Round your answer to 2 decimal places.) Expected rate of return

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