Question
Assume the economy has a 70% chance that the market return will be 15% next year and a 30% chance the market return will be
Assume the economy has a 70% chance that the market return will be 15% next year and a 30% chance the market return will be 5% next year. Assume the risk-free rate is 2%. If Software, Inc.'s beta is 1.8, what is it's expected return next year?
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Finance Applications and Theory
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