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A stock has an expected return of 12.5 percent and a beta of 1.15, and the expected return on the market is 11.5 percent. Required:

A stock has an expected return of 12.5 percent and a beta of 1.15, and the expected return on the market is 11.5 percent. Required: What must the risk-free rate be? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

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