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Suppose you observe the following situation:

Stock Beta Expected Return

Pete Corp. 1.15 12.9%

Repete Co. 0.84 10.2%

Assume these stocks are correctly priced. Based on the CAPM, what is the expected return on the market? What is the risk-free rate?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92305779

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