Suppose you are a financial planner and your client has asked you to use CAPM to select between Stock "Hazelnut" and Stock "Walnut." The market required rate of return is 10% and the risk-free rate is 6%. You also have known extra information that the expected return of Stock "Hazelnut" is 12% whereas the expected return of Stock "Walnut" is 11%. The following table shows historical rates of return that can be used to calculate beta coefficients of both stocks. Year Stock "Hazelnut" Stock "Walnut" 1 -15% 2 5% 3 25% Market 0% -596 5% 5% 10% 1596 10. Calculate betas of both stocks. 11. Calculate the required rates of return of both stocks. 12. Which stock should you recommend to your client to invest? Explain. 13. Which stock is overvalued? Explain.