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Determine the expected return on solomon stock

Problem: Suppose the expected return on the market portfolio is 13.8 %and the risk free rate is 6.4%. Solomon Inc. stock has a beta of 1.2. Assume the capital-asset-pricing model holds.

A. What is the expected return on Solomon's stock?

B. If the risk free rate decreases to 3.5%, what is the expected return on Solomon's stock?

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Finance Basics: Determine the expected return on solomon stock

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Finance Basics: Determine the expected return on solomon stock

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