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Suppose you observe the following situation: Suppose you observe the following situation: (a) Calculate the expected return on each stock. (Do not round intermediate calculations.

image text in transcribedSuppose you observe the following situation:

Suppose you observe the following situation: (a) Calculate the expected return on each stock. (Do not round intermediate calculations. Enter your answers as a percentage rounded to 2 decimal places (e.g., 32.16).) (b) Assuming the capital asset pricing model holds and stock A's beta is greater than stock B's beta by 13, what is the expected market risk premium? (Do not round intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (e.g., 32.16).)

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