Q1: a) Use the basic equation for the capital asset pricing model (CAPM) to Find the risk-free rate for a firm with a required return of 15% and a beta of 1.25 when the market return is 14% b) Find...

Q1: a) Use the basic equation for the capital asset pricing model (CAPM) to Find the
risk-free rate
for a firm with a required return of 15% and a beta of 1.25 when the market return is 14%

 b) Find the beta of a portfolio of three stocks. One third of the portfolio is invested in each of the stocks. The stocks and their betas are as follows: Mallmart, beta 1.10; Peak Power Co., beta 0.85; and Micro Ease, beta 1.40.