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Suppose the market risk premium is 10%, market volatility (s M ) is 30% and the risk-free rate is 2%. Stock A has a volatility

Suppose the market risk premium is 10%, market volatility (s_M) is 30% and the risk-free rate is 2%.

Stock A has a volatility (s_A) of 60% and a correlation (r_A,M) with the market portfolio of 25%. According to the CAPM,

1) What is its beta?

2) What is its expected return?

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