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Suppose the return on the market is expected to be 14%, a stock has a beta of 1.2, and the T-bill rate is 6%. 1.

Suppose the return on the market is expected to be 14%, a stock has a beta of 1.2, and the T-bill rate is 6%.

1. What is the expected return of the stock?

2. If now the return of stock is 17%, what is the alpha for the stock?

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