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The current stock price of the Down Under Clothing Company of Australia is A$50 per share and its expected rate of return over the coming
The current stock price of the Down Under Clothing Company of Australia is A$50 per share and its expected rate of return over the coming year is 14%. The market risk premium in Australia is 8% per year and the risk -free interest rate is 6% per year. According to the CAPM, What would happen to the stock's current price if the covariance of the stock with the market portfolio falls by half while everything else remains the same?
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