The rate of return for market portfolio FBM KLCI is 16%. You are given the following information. Crafty stock: Current price is $11, analyst's forecast of future price and dividend are $12 and $0.3 respectively. Beta value is 0.45 and the stock's risk premium is 2.25% Witty stock: Current price is $18, analyst's forecast of future price and dividend are $22 and $0.85 respectively. The stock's risk premium is -0.5% Based on analysts forecast, calculate the forecasted returns of Crafty.

a.11.8%

b. 9.09%

c. 10.83%

d. 9.33%

Based on analysts forecast, calculate the forecasted returns of Witty.

a. 22.2%

b. 26.9%

c. 18.18%

d. 21.82%