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Suppose that during the next year the interest rate on the U.S. Treasury bills is expected to be 1% and the rate of return on
Suppose that during the next year the interest rate on the U.S. Treasury bills is expected to be 1% and the rate of return on S\&P 500 is expected to be 12%. If ABC stock's beta is 1.40, what is the required rate of return on ABC stock next year? 13.4% 16.4% 17.8% 18.2% According to the text, which of the following is a formula to determine the present value of a lump sum payment in the future? (PMT/i)[(1+i)n1] (PMT/i)[11/(1+i)n] PMT/i FV/(1+i)n None of the above
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