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Stock Y has a beta of 1.35 and an expected return of 14.3 percent. Stock Z has a beta of 0.8 and an expected return
Stock Y has a beta of 1.35 and an expected return of 14.3 percent. Stock Z has a beta of 0.8 and an expected return of 10.7 percent. Required: What would the risk-free rate have to be for the two stocks to be correctly priced relative to each other?
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