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Here are data on two companies. The T-bill rate is 3.5% and the market risk premium is 6.5%. $1 Discount Store Everything $5 11% Company
Here are data on two companies. The T-bill rate is 3.5% and the market risk premium is 6.5%. $1 Discount Store Everything $5 11% Company Forecast return 12% Standard deviation of returns 8% 10% Beta 1.5 1.0 Based on the fair return and according to the capital asset pricing model (CAPM), is each firm properly priced? $1 Discount Store Everything $5
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