How can you estimate the required rate of return for an "average-risk" investment?

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10 Your investment adviser expects asset a to eam a rate of return of 12% this year. The beta of asset a is 1.50. If the rate of return available on risk-free assets is 2% and the expected return on the market portfolio is 9%. Does this return on asset a seem reasonable as compensation for its risk? Explain why or why not. Fill in your answer here Help D