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b. Julian is considering the purchase of Debonaire Furnishings shares where the estimated return is 6.25% p.a. It was also found that the responsiveness of
b. Julian is considering the purchase of Debonaire Furnishings shares where the estimated return is 6.25% p.a. It was also found that the responsiveness of the stock's price to the overall market is 0.86 , and the market annual returns are 8%. i) Given that the 10-year Treasury bill return is 3.5% p.a., what is the expected return of the share? (5 marks) ii) Should Julian buy this stock? (give reasons)
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