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1) As a financial manager, you found that capital market is very risky and volatile. Beta (B) measures market of the firm. The shareholders of

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1) As a financial manager, you found that capital market is very risky and volatile. Beta (B) measures market of the firm. The shareholders of your firm, however, heard another firm with negative beta and they are confused now. The shareholders of your firm would like to know if a firm can have a negative beta. If yes, what would the expected return on such a firm be? Why? Please explain your reasoning by providing a quality argument. (4 Points)

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