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GIven the Beta of two companies: A is 1.3 and Z is 1.0 The T-bill rate is 5.2% and the market risk premium is 8.0%.

GIven the Beta of two companies: A is 1.3 and Z is 1.0

The T-bill rate is 5.2% and the market risk premium is 8.0%.

Calculate the expected returns of companie A and Z

Hint: Use the equation:

E(r) = rf + [E(rM) rf]

And risk free rate: rf = 5.2%

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