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PROBLEM: A stock has a beta of 1 . 1 4 , the expected return on the market is 1 0 . 8 percent, and

PROBLEM: A stock has a beta of

1.14,

the expected return on the market is

10.8

percent, and the risk

-

free rate is

4.55

percent.

What must the expected return on this stock be under the CAPM?

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