Transcribed image text: IBM stock has a beta of 0.89 and a standard deviation of 10%. Suppose

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Transcribed image text: IBM stock has a beta of 0.89 and a standard deviation of 10%. Suppose the risk free rate in the market is 5%, and the stock market return is 12%, (1) Use CAPM to calculate the required return on IBM stock. (Hint: not every piece of information in the question is needed for the calculation) You must show your work to earn credit. (2) If the minimum return you require to earn is 10%, should you buy this stock based on the calculated result? Why

Posted Date: Jul 03, 2024 12:44 PM

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Transcribed image text: IBM stock has a beta of 0.89 and a standard deviation of 10%. Suppose

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