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Common Stock Expected Return Standard Deviation Correlation between stock and the market potfolio A 11% 7% 0.9 B 10% 15% 0.5 C 16% 18% 0.3
Common Stock
Expected Return | Standard Deviation | Correlation between stock and the market potfolio | |
A | 11% | 7% | 0.9 |
B | 10% | 15% | 0.5 |
C | 16% | 18% | 0.3 |
The standard deviation (S. D.) for the market portfolio is 8%, the risk-free rate is 6%, and the market risk premium is 9.5%. Estimate the beta for each stock and use the CAPM to determine which stocks appear to be attractive investments.. SHOW DETAILED CALCULATIONS.
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