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Problem 12-20 CAPM and Expected Return (LO2) Stock A has a beta of 0.5, and investors expect it to return 5%. Stock B has a
Problem 12-20 CAPM and Expected Return (LO2) Stock A has a beta of 0.5, and investors expect it to return 5%. Stock B has a beta of 1.5, and investors expect it to return 13%. Use the CAPM to calculate the market risk premium and the expected rate of return on the market. (Enter your answers as a whole percent.) Market risk premium Expected market rate of return
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