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A B C 1. Stock ABC has beta2, the risk free rate is 1 percent and the market 1 risk premium is 6 percent. 2

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A B C 1. Stock ABC has beta2, the risk free rate is 1 percent and the market 1 risk premium is 6 percent. 2 3 Please calculate the expected return on the market. 2 4 5 Using CAPM, what is the expected return of stock ABC? 6

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