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7. Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. $1 DiscountEverything Company Store $5 Forecasted

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7. Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. $1 DiscountEverything Company Store $5 Forecasted return 12% 11% Standard deviation of returns 8% 10% Beta 1.0 1.5 What would be the fair return for each company according to the capital asset pricing model (CAPM)? (Do not round intermediate calculations.)

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