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Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (I0) =.025 and the risk premiums for the
Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return (I0) =.025 and the risk premiums for the two factors are (I1)=.12 and (I2)=.10. Assume that stocks A,B, and C never pay dividends and stocks A,B, and C are currently trading at $10,$20, and $30, respectively. What is the expected price next year for each stock? $11.05$22.18$30.96$10.82$21.82$30.99$11.32$22.56$30.99$11.65$22.42$30.96
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