1. What is the required rate of return on a stock with a beta of 0.6? Round your answer to one decimal place

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2. Calculate the required rate of return for Mudd Enterprises assuming that investors expect a 4.5% rate of inflation in the future. The real risk-free rate is 1.5%, and the market risk premium is 5.5%. Mudd has a beta of 2.5, and its realized rate of return has averaged 11.5% over the past 5 years. Round your answer to two decimal places.

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