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A stock has a beta of 1 and an expected return of 9.3%. A risk-free asset has an expected return of 3.8%. What is the
A stock has a beta of 1 and an expected return of 9.3%. A risk-free asset has an expected return of 3.8%. What is the stock's "slope" a.k.a. compensation for systematic risk? In other words, if you take a portfolio of the stock and the risk-free asset and then change the weights to increase the beta by 1, how much will the expected return increase as a result?
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