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HW3.dvi You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and you estimate the market risk premium to

HW3.dvi

You are analyzing a stock that has a beta of 1.2. The risk-free rate is 5% and you estimate the market risk premium to be 6% . If you expect the stock to have a return of 11% over the next year, should you buy it? Why or why not?

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