Year	Price
2004	100
2005	110
2006	104.5
2007	106.59
2008	106.59
2009	110.85
2010	108.63

a). Compute the expected (annual) return of the market index as the arithmetic average of the annual returns of the market index.

b) Assume that the rate of return of risk-free bond equals 0.75% and use the above market index as the Market Portfolio. Assuming that the CAPM holds, what is the expected return of asset A whose beta equals 0.8.

c) What, according to the CAPM, is the beta of an asset C whose expected return equals 0.75% (that is, the risk-free rate in this problem)?

Thank you!