Finding the expected return of investing


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Q: Suppose the market risk premium is 6% and the risk-free interest rate is 4%. Using table, calculate the expected return of investing in H.J Heinz stock, calculate the expected return of investing in Cisco system stock and calculate the expected return of investing in General Electric stock?

Table: Betas with respect to the S & P 500 for individual stocks and average betas for stocks in their industries(based on monthly data for 2000-2005)

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