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

	Standard Deviation (%)	R 2	Beta	Standard Error of Beta
TDM	13	0.49	0.83	0.11
LLW	21	0.01	0.21	0.25

1. What proportion of each stock's risk was market risk, and what proportion was specific risk?
2. What is the variance of TDM Bank? What is the specific variance?
3. What is the confidence interval on LLW's beta?
4. If the CAPM is correct, what is the expected return on TDM Bank? Assume a risk-free interest rate of 5% and an expected market return of 12%.
5. Suppose that next year the market provides a zero return. Knowing this, what return would you expect from TDM Bank?