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Part II Jack Hui is evaluating the performance of IU stock and stock market index considering the expected return, beta and standard deviation. The risk-free
Part II Jack Hui is evaluating the performance of IU stock and stock market index considering the expected return, beta and standard deviation. The risk-free rate is 3.5%. Stock IU Market Expected Return 13.5% 10.5% Beta 1.3 1.0 Standard Deviation 7% 5% REQUIRED Based on Capital Asset Pricing Model (CAPM), will you recommend to buy or sell the IU stock? Illustrate with calculations on the differences between the expected return and the CAPM required return of IU stock to conclude your answer within 20 words
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