12%

b)5%

C)E(r)=rf+b*(E(rm)-rf), (b stands for beta value), that is, e (r) = 5%-0.5 * (12%-5%) =1.5%.

The expected rate of return in the second year is e (R2) = (d+p1-P0)/P0 = (3+41-40)/40 =10% >1.5%, so it is underestimated.

2. e (RP) = RF+b * (e (RM)-RF) = 6%+b * (14%-6%) =18%, so the β value is b= 1.5.

3. Do you lack the conditions and don't know how to do it?