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8-4 Expected and required rates of return Assume that the risk-free rate is 5 percent and the market risk premium is 6 percent. What is

8-4 Expected and required rates of return Assume that the risk-free rate is 5 percent and the market risk premium is 6 percent. What is the expected return for the overall stock market? What is the required rate of return on a stock with a beta of 1.2?

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