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d) What does the beta equal to one mean? [2 marks] (e) A share in a company has a beta of 1.28 and has just

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d) What does the beta equal to one mean? [2 marks] (e) A share in a company has a beta of 1.28 and has just paid an annual dividend of RM 0.20. The expected annual rate of return on the market portfolio is 12% and the risk free rate is 3%. Compute (i) the risk premium of the share, and (ii) the expected return on the share [5 marks] [Total 25 marks]

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