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Here are data on two companies. The T-bill rate is 5.4% and the market risk premium is 6.8%. Company $1 Discount Store Everything $5 Forecast
Here are data on two companies. The T-bill rate is 5.4% and the market risk premium is 6.8%.
Company | $1 Discount Store | Everything $5 | |||||||||||||||||
Forecast return | 13% | 12% | |||||||||||||||||
Standard deviation of returns | 15% | 17% | |||||||||||||||||
Beta | 1.6 | 1 | |||||||||||||||||
What would be the fair return for each company, according to the capital asset pricing model (CAPM)? (Round your answers to 2 decimal places.)
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