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3. Using Beta. A stock with a beta of .8 has an expected rate of return of 12%. If the market return this year turns

3. Using Beta. A stock with a beta of .8 has an expected rate of return of 12%. If the market return

this year turns out to be 5 percentage points below expectations, what is your best guess as to

the rate of return on the stock? (LO12-1)

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