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4. Assume that the CAPM is a good description of stock price returns. The market expected return is 7% with 10% volatility and the risk-free

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4. Assume that the CAPM is a good description of stock price returns. The market expected return is 7% with 10% volatility and the risk-free rate is 3%. New news arrives that does not change any of these numbers but it does change the expected return of the following stocks: Expected ReturnVolatility Green Leaf NatSam HanBel Rebecca Automobile 12% 10% 9% 6% 20% 40% 30% 35% Beta 1.5 1.8 0.75 1.2 At current market prices, which stocks represent buying opportunities? On which stocks should you put a sell order in? a. b

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