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Using monthly returns from 1990-2001, you estimate that WalMart's beta is 1.89 (std err = 0.28) and Tiffany's beta is 0.61 (std err = 0.12).
Using monthly returns from 1990-2001, you estimate that WalMart's beta is 1.89 (std err = 0.28) and Tiffany's beta is 0.61 (std err = 0.12). If these estimates are a reliable guide going forward, what expected rate of return should you require for holding each stock? (No calculations are needed beyond multiplication and division to solve). Please show steps
Expected Market Return
Use NPV method to solve
This is a Capital Asset Pricing Model
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