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Please show all formulas, calculations, and steps for each answer: A stock has a beta of 1.3. The risk-free rate is 4%. Assume that the

Please show all formulas, calculations, and steps for each answer:

A stock has a beta of 1.3. The risk-free rate is 4%. Assume that the CAPM holds.

Question 1:

What is the expected return for the stock if the expected return on the market is 14%?

Question 2:

What is the expected return for the stock if the expected market risk premium is 14%?

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