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CAPM question - Assume the expected return of a stock with beta of 2 is 13%. If a return of 10% is forecasted next year,
CAPM question - Assume the expected return of a stock with beta of 2 is 13%. If a return of 10% is forecasted next year, what could we deduce from the stock's current valuation? If historically the excess returns were higher than this, what are the investment implications of this findings?
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