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3. According to CAPM, the fair return of the stock is 15%. (a) What is the stocks beta if the riskfree rate is 3% and

3. According to CAPM, the fair return of the stock is 15%.

(a) What is the stocks beta if the riskfree rate is 3% and the market return is 12%?

(b) What is the standard deviation of the return on the market portfolio if cov(ri, rM ) = 0.06

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