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Suppose that the CAPM is a good model of risk in the stock market. Suppose also that the average excess return on stocks is 10% and that the risk free interest rate is 1%. What would you expect to be the return to stocks with each of the following beta coefficients?

A - (-.05)

B - 0.3

C - 1.0

D - 2.0

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M943490

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