The table below provides the distribution of possible returns for Rupawati Berhad's shares.

Economic state	Recession	Stagnant	Low Growth	High Growth
Probability	0.2	0.4	0.3	0.1
Possible return	-8%	9%	16%	27%

(a) What are the (i) expected return and (ii) standard deviation of return for Rupawati Bhd.'s shares? (8 marks)

(b) If the beta for Rupawati Bhd's shares is 0.92, and the expected return, and beta for Ai Ling Berhad's shares are, respectively, 10.796 and 1.12, and both shares have the same reward-to-risk ratio, then what is the risk-free rate? (4.5 marks)

(c) If the shares of Rupawati Bhd., are fairly priced, then what is the market risk premium? (2.5 marks)