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Assume that CAPM holds in the economy. Stock AAA has a risk premium of 7%. Stock BBB has Beta that is twice as high

Assume that CAPM holds in the economy. Stock AAA has a risk premium of 7%. Stock BBB has Beta that is twice

Assume that CAPM holds in the economy. Stock AAA has a risk premium of 7%. Stock BBB has Beta that is twice as high as stock AAA: BBBB=2-BAAA. What is the risk premium on stock BBB? Show your work.

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To calculate the risk premium on stock BBB BAAA given that it has a Beta that is twice as high as stock AAA BBBB 2 BAAA you can use the Capital Asset ... blur-text-image

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