Assume the expected return on the market portfolio is 14.7, Ask an Expert

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Assume the expected return on the market portfolio is 14.7% and the risk free rate is 4.9%. Morrow Inc. stock has a beta of 1.3 Suppose the capital asset pricing model holds.

a) Determine the expected return on Morrow's stock?

b) If the risk-free rate decreases to 3.7 percent, what is the expected retun on Morrow's stock?

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