The following table shows estimates of the risk of two well-known Canadian stocks:

	Standard			Standard
	Deviation (%)	R2	Beta	Error of Beta
Sun Life Financial	21.7	0.15	0.89	0.14
Loblaw	22.5	0.03	0.66	0.23

1. What proportion of each stocks risk was market risk, and what proportion was specific risk?
2. What is the variance of the returns for Sun Life Financial stock? What is the specific variance?
3. What is the confidence interval on Loblaw's beta?
4. If the CAPM is correct, what is the expected return on Sun Life? Assume a risk-free interest rate of 4% and an expected market return of 11%.
5. Suppose that next year, the market provides a 14% return. Knowing this, what return would you expect from Sun Life?