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Capm and expected return

Problem: CAPM and Expected Return. Stock A has a beta of .5 and investors expect it to return 5 percent. Stock B has a beta of 1.5 and investors expect it to return 13 percent. Use the CAPM to find the market risk premium and the expected rate of return on the market.

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Finance Basics: Capm and expected return

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Finance Basics: Capm and expected return

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