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14. Explain the relationship between the volatility of a stock and the price of the call and put options on that stock (in qualitative terms).

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14. Explain the relationship between the volatility of a stock and the price of the call and put options on that stock (in qualitative terms). Why is this so? (3 pts.) 15. A stock has a beta of 2.5, and the return on the market is expected to be 12% and the risk-free rate is 7%. What is the total expected return on the stock under the CAPM? (3 pts.)

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