1. If the expected rate of return on the market portfolio is 12% and T-bills yield 4%, what must be the beta of a stock that investors expect to return 9%? (Round your answer to 4 decimal places.) Beta of a stock

2. The risk-free rate is 6% and the expected rate of return on the market portfolio is 10%. a. Calculate the required rate of return on a security with a beta of 1.24. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Required return % b. If the security is expected to return 16%, is it overpriced or underpriced? Overpriced Underpriced