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The market portfolio has expected return of 10% and volatility of 30%. The risk-free rate is 4%. Stock A has volatility of 40% and its

  1. The market portfolio has expected return of 10% and volatility of 30%. The risk-free rate is 4%. Stock A has volatility of 40% and its return has correlation of 0.6 with the return on the market portfolio. What is the expected return of stock A based on Capital Asset Pricing Model?


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