Suppose you observe the following situation:

Security T24.6 T15.3

Beta 2.00 0.75

Expected Return 24.6 15.3

Requirement-A. If the current market data shows that the risk-free rate is 5.59 percent, are these securities correctly priced? <1 mark>

Requirement-B. What would the risk-free rate have to be if these securities are correctly priced? <1 mark>

Requirement-C. If these two securities are correctly priced, find the market risk premium (using the findings of Requirement-B). <1 mark>

Requirement-D. Draw the Security Market Line (SML) with clear labels, and plot these two securities on the graph along with the market and risk-free rate (using the findings of Requirements B and C). <1 mark>