(Expected rate of return using CAPM)

a.Compute the expected rate of return for Acer common stock, which has a

1.9

beta. The risk-free rate is

6

percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of

15

percent.

b.Why is the rate you computed the expected rate?

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Part 1

a.The expected rate of return for Acer common stock is

enter your response here%.

(Round to one decimal place.)