You are provided with the following monthly expected returns, each of which is represented by E(Ri), and betas for the following stocks. Please estimate the capital asset pricing model and draw conclusions about the significance and realism of the results by using the R-squared and “t” statistics. Assume a one-tailed test.

If the expected return on the market is 8% and the risk for your rate is 4%. What is the expected return for a stock with a beta equal to 2.00? 

Suppose that the index model for stocks A and B is estimated from excess returns with the following results: RA= 2.0% + 0.40RM + eA RB = -1.8%+ 0.9RM + eB OM = 15%; R-squareA = 0.30; R-squareB = 0.22 What is the standard deviation of each stock? Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Stock A Stock B Standard Deviation % %

A popular social media platform has begun offering stock shares to the public. In the past 2 years, the price of the stock has generally increased. An investment specialist gathers data on the stock price over the past 2 years and proposes two models for estimating the growth of the stock, as shown in the scatterplots. Based on the scatterplots, which type of model is most suitable for estimating the stock price? O A power model is suitable because the scatterplot of log(weeks) against log(stock price) shows a curved relationship. O A linear model is suitable because the scatterplot of weeks against log(stock price) shows a strong linear relationship. log(Stock Price) vs. Weeks 2.28 O An exponential model is suitable because the scatterplot of log(weeks) against log(stock price) shows a curved relationship. 2.26 2.24 2.22 22 P2.18 2 16 * 214 212 21 2.08 O An exponential model is suitable because the scatterplot of weeks against log(stock price) shows a strong linear relationship. Mark…