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4. The market return is expected to be 12%. The stock you are considering investing in a stock that has a beta of 1.2. and
4. The market return is expected to be 12%. The stock you are considering investing in a stock that has a beta of 1.2. and the rf = 4%. a. If the risk-free rate is 4%, use the SML to indicate what the expected return on the stock is. b. Your neighbor believes the stock should have an expected return of 17%. What is your neighbor's implied alpha value
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