Expectation of the rate of return on the stock


Investors expect the market rate of return this year to be 12.50%. The expected rate of return on a stock with a beta of 0.9 is currently 11.25%. If the market return this year turns out to be 9.70%, how would you revise your expectation of the rate of return on the stock?

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Finance Basics: Expectation of the rate of return on the stock
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