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Stock P has an expected return of 15.5%. Stock Q has a beta of .85 and an expected return of 12.0%. The risk-free rate is

Stock P has an expected return of 15.5%. Stock Q has a beta of .85 and an expected return of 12.0%. The risk-free rate is 3.0%. These two stocks are correctly priced relative to each other, in equilibrium.

What formula do you use to solve the beta of P?

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