The covariance between the returns on the shares of Ford and the returns on the S&P500 is equal to 0.07 and its volatility is 11%. The US government tbills are currently offering a return of 1.7% and Bundesbank one year issues are offering 1.9%. The expected risk premium on the S&P500 index is 9% and its volatility 8%. a. Determine the expected rate of return of Ford shares according to CAPM. b. In this market, the covariance between the returns on 5 year bonds issued by INTEL and the returns on the S&P500 is 0.003. Can you compute the expected rate of return on INTEL bonds using the CAPM or is the CAPM used only for shares? Can you compute the beta of bonds and other fixed-income securities? Would you expect covariance with the market portfolio to be high or low? Which type of risk will be more important in this case? Can we compute a required rate of return?