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4. Stock A has an expected return of 12% and a beta of 1.1 Stock B is expected to return 10% with a beta of

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4. Stock A has an expected return of 12% and a beta of 1.1 Stock B is expected to return 10% with a beta of 1.4. The market's expected return is 9% and risk free rate is 4%. According to the CAPM, what is the alpha of each stock? Which stock is a better buy? (15 points)

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