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The market risk premium is 10%, the risk-free rate is 1%, the value premium is 3%, and the small firm premium is 4%. A stock
The market risk premium is 10%, the risk-free rate is 1%, the value premium is 3%, and the small firm premium is 4%. A stock has a market beta of 1.5, a small firm beta of 0.5, and a value beta of 0.0. What is the expected return of the stock according to the CAPM and the FF3 models, respectively? Group of answer choices:
15%, 16%
16%, 15%
18%, 16%
16%, 18%
None of the above
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