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A stock has a beta of 1.6. The risk-free rate is 2% and the expected market return is 10%. Suppose that the actual return on

A stock has a beta of 1.6. The risk-free rate is 2% and the expected market return is 10%. Suppose that the actual return on the stock was 14%. What is its alpha?

Suppose that the CAPM holds. The market return is 10%, the risk-free rate is 2% and variance of the market portfolio is 0.44. Covariance between stock ABC and the market return is 0.168. What is stock ABCs expected return?

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