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The data in the table below was estimated using returns for the period 2001 to 2011. What can you conclude about the return on stocks

The data in the table below was estimated using returns for the period 2001 to 2011.

  1. What can you conclude about the return on stocks with high book-to-market ratios relative to stocks with low book-to-market ratios? What can you conclude about the return on large capitalisation stocks relative to small capitalisation stocks?

  2. Suppose that the risk-free rate is 3%. What is the expected return of Chevron?

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