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This is a question of financial markets and analysis. Thanks for your help. Consider the following table, which gives a security analyst's expected return on

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This is a question of financial markets and analysis. Thanks for your help.

Consider the following table, which gives a security analyst's expected return on two stocks for two particular market returns- a) Explain the CAPM model. What are the betas of the two stocks? b) What is the expected rate of return on each stock if the market return is equally likely to be 5% or 20%? c) If the T-bill rate is 8% and the market return is equally likely to be 5% or 20%, what is the Securities Market Line equation for this economy. d) Describe any two ways of estimating common factors in a factor model? List the advantages and disadvantages of each method

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