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1. The risk free rate is 17.9% and the market return is 17.5%. If the beta of stock E is 1.2, it implies that: A.

1. The risk free rate is 17.9% and the market return is 17.5%. If the beta of stock E is 1.2, it implies that: A. Risk premium is 0.4%. B. Capital markets are inefficient. C. Total risk premium is 0.48%. D. 3.82%.

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