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Problem:

The stock of Big Joe's has a beta of 1.32 and an expected return of 11.70 percent. The risk-free rate of return is 4.2 percent.

Required:

Question: What is the expected return on the market?

  • 13.04 percent
  • 9.88 percent
  • 6.16 percent
  • 7.50 percent
  • 8.56 percent

Note: Please provide equation and explain comprehensively and give step by step solution.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M91147963

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