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Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. Suppose also that the expected return required by the market for
Suppose the yield on short-term government securities (perceived to be risk-free) is about 4%. Suppose also that the expected return required by the market for a portfolio with a beta of 1 is 12%. According to the capital asset pricing model what would be the expected return on a zero-beta stock? (Do NOT enter % sign. If your answer is 0.0678 or 6.78% enter only 6.78. Round your answer to 2 decimal places.)
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