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Assume that the CAPM holds. Using monthly returns, you concluded that Amazon's beta is 1.5. You expect a return of 20% for Amazon over
Assume that the CAPM holds. Using monthly returns, you concluded that Amazon's beta is 1.5. You expect a return of 20% for Amazon over the next 12 months. Similarly, you concluded that GE has a beta of 1 and an expected return of 15%. Based on this information, the expected return over the next 12 months (in percentage terms) for a diversified portfolio with a beta of 2 is:
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Fundamentals of Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
11th edition
77861701, 978-0077861704
