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a. What rate of return should an investor expect for a stock that has a beta of 0.8 when the market is expected to yield

a. What rate of return should an investor expect for a stock that has a beta of 0.8 when the market is expected to yield 14% and Treasury bills offer 6%?

9.2%

11.2%

12.4%

12.8%

b. The intercept of the security market line is the rate of return which corresponds to:

the risk-free rate.

the market rate of return.

a value of 1.0.

the market risk premium

please answer both parts

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