The risk-free rate is 4.5% and you believe that the S&P 500's excess return will be 11.7%
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Question:
The risk-free rate is 4.5% and you believe that the S&P 500's excess return will be 11.7% over the next year. If you invest in a stock with a beta of 1.1 (and a standard deviation of 30%), what is your best guess as to its expected excess return over the next year?
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