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Assume that there is a 38% chance that the market return next year will be 10,00%. The market can also return 4,00% or -8,50%, both
Assume that there is a 38% chance that the market return next year will be 10,00%. The market can also return 4,00% or -8,50%, both of which are equally likely (i.e., the probability of either outcome is [1-38%]/2). Assume the risk-free rate is 3,00%. If a firm's beta is 1,55, what is its expected return on equity next year
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