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The beta of Big Sky Inc. is 1 . 7 5 . The T - bill rate is 4 % and the market risk premium

The beta of Big Sky Inc. is

1.75 .

The T

-

bill rate is

4 %

and the market risk premium is

12 % .

)

What is the risk premium on the stock?

(5

pts

)

)

What is the expected rate of return?

(5

pts

)

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