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Suppose that returns on Durham Company have a covariance with the market of 0.0635 and that the variance of the market returns is 0.04326. The
Suppose that returns on Durham Company have a covariance with the market of 0.0635 and that the variance of the market returns is 0.04326. The market risk premium is 9.4 percent and the expected return on Treasury bills is 4.9 percent. What is the required return of Durham Company?
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