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Assume the risk-free rate is 4.1% and expected market risk premium is 6.4%. Suppose that you have observed the following returns over time: Year Stock
Assume the risk-free rate is 4.1% and expected market risk premium is 6.4%. Suppose that you have observed the following returns over time:
Year | Stock A | Market |
2015 | 5% | 12% |
2016 | 7% | 10% |
2017 | -9% | -12% |
2018 | 1.5% | 1% |
2019 | 10% | 15% |
2020 | 17.5% | 20% |
What is the beta for Stock A and what is the required return for A based on CAPM?
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