14 Suppose that the CAPM is a good model of risk in the stock market. Suppose also...

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14 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 percent and that the risk-free interest rate is 1 percent. What would you expect to be the return to stocks with each of the following beta coefficients?

a 20.5 b 0.3 c 1.0 d 2.0

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MandB 3

ISBN: 978-1285167978

3rd Edition

Authors: Dean Croushore

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