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. Here are data for two companies. The T-bill rate is 3.25% and market risk premium is 7.5%. (8) Company ABC XYZ Realized Return 14.5%

. Here are data for two companies. The T-bill rate is 3.25% and market risk premium is 7.5%. (8)

Company ABC XYZ

Realized Return 14.5% 10.5%

Beta 1.3 1.15

What would be the fair return for each company, according to the CAPM?

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