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A stock has a beta of 1.6. The risk-free rate is 3%. Assume that the CAPM holds. Part 1 What is the expected return for

A stock has a beta of 1.6. The risk-free rate is 3%. Assume that the CAPM holds.

Part 1

What is the expected return for the stock if the expected return on the market is 7%?

Part 2

What is the expected return for the stock if the expected market risk premium is 7%?

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