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Stock A has an expected return of 14.4 percent and a beta of 1.21. Stock B has an expected return of 12.87 percent and a

Stock A has an expected return of 14.4 percent and a beta of 1.21. Stock B has an expected return

of 12.87 percent and a beta of 1.06. Both stocks have the same reward-to-risk ratio. What is the risk-

free rate?

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