Suppose the yield on short-term government securities (perceived to be risk-free) is about 6%. Suppose also that the expected return required by the market for a portfolio with o beta of 1.0 is 16.0%. According to the capital asset pricing model: Required: a. What is the expected return on the market portfolio? (Round your answer to 1 decimal place.) b. What would be the expected return on a zero-beta stock? Supoose vou consider buvina a share of stock at a orice of \$65. The stock is exoected to Dav a dividend of $8 next vear c-1. Using the SML, calculate the fair rate of retum for a stock with a =0.5. (Round your answer to 1 decimal place.) c-2. Calculate the expected rate of return, using the expected price and dividend for next year. (Round your answer to 2 decimal places.) c-3. Is the stock overpriced or underpriced? Overpriced Underpriced Suppose the yield on short-term government securities (percelved to be risk-free) is about 6%. Suppose also that the expected return required by the market for a portfolio with a beta of 1.0 is 16.0%. According to the capital asset pricing model: Required: a. What is the expected return on the market portfolio? (Round your answer to 1 decimat place.) b. What would be the expected return on a zero-beta stock? Suppose you consider buying a share of stock at a price of $65. The stock is expected to pay a dividend of $8 next year and to sell then for $68. The stock risk has been evaluated at =0.5. -1. Using the SML, calculate the fair rate of return for a stock with a =0.5. (Round your answer to 1 decimal place.) Suppose you consider buying a share of stock ot a price of $65. The stock is expected to pay a dividend of $8 next year and to sell then for $68. 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. (Round your answer to 1 decimal place.) c-2. Calculate the expected rate of refurn, using the expected price and dividend for next year. (Round your answer to 2 decimal places.) c-3. Is the stock overpriced or underpriced? Overpriced Underpriced