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b. (The security market line) The pure rate of interest is 3%, investors demand a 5% inflation premium on long-term investments, and the risk premium

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b. (The security market line) The pure rate of interest is 3%, investors demand a 5% inflation premium on long-term investments, and the risk premium for a stock with beta of 1 is 7%. ZZZ stock has a beta of 1.35. a. What is the required rate of return on ZZZ sock

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