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01 - Given the following returns on Stock J and the market during the last five years, what is the beta coefficient of Stock J?

01 - Given the following returns on Stock J and "the market" during the last five years, what is the beta coefficient of Stock J?

Year Stock J Market

1 -13.85% - 8.63%

2 22.90 12.37

3 35.15 19.37

4 12.48 5.73

5 5.25 2.35

A.

0.92

B.

1.75

C.

1.10

D.

2.24

E.

1.45

02 - Using the beta you get in the previous question, if the riskfree rate is 5%, the expected return on the market is 12%, when the equilibrium exists, what is the expected return of Stock J?

A.

17.25%

B.

12%

C.

5%

D.

0%

E.

1%

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