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Stocks A ( E ( RA ) = 1 0 % BetaA = 1 . 3 5 ) and B ( E ( RB )

Stocks A (E(RA)=10% BetaA =1.35) and B (E(RB)=13.5% BetaB =1.95) are correctly valued according to the CAPM model (at equilibrium).
a) Find the parameters of the equilibrium line.
b) If stock C (Betac =0.75) is correctly valued, what should its return be?
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