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Suppose the risk-free return is 3%; T he market portfolio has an expected return of 8% and a volatility of 10%. Merck & Co. (Ticker:

Suppose the risk-free return is 3%; The market portfolio has an expected return of 8% and a volatility of 10%.

Merck & Co. (Ticker: MRK) stock has a 12% volatility and a correlation with the market of 0.19.

Under the CAPM assumptions, what is its expected return?

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