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4. Assume CAPM holds. The expected return on the market = 15%, risk-free rate = 8%, actual return on XYZ security = 17%, beta of
4. Assume CAPM holds. The expected return on the market = 15%, risk-free rate = 8%, actual return on XYZ security = 17%, beta of XYZ security = 1.25. Calculate XYZ's alpha
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