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Last year you invested in two stocks. The risk-free rate was 4% and the market risk premium was 6%. The stock performance for the past
Last year you invested in two stocks. The risk-free rate was 4% and the market risk premium was 6%. The stock performance for the past year is given below: Stock A Stock B Beta 1.25 0.85 1-year Return 11.2% 9.3% You use CAPM to evaluate the performance of your investment. Which stock(s) have outperformed the CAPM expected return? Both OA Neither
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