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Assume that the CAPM holds and describes real stock markets. We just observed that the market portfolio has an expected return of 1 0 %

Assume that the CAPM holds and describes real stock markets. We just observed that the market portfolio has an expected return of 10% and a volatility of 20%, while Microsoft stock has a volatility of 30%. Given this higher volatility, should we expect Microsoft's cost of equity to be greater than 10%? Please explain your answer.

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