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What is the expected annual return on Caterpillar if it has a beta of 0.90; the annual one-year Treasury bill rate is 1.00%; and the
What is the expected annual return on Caterpillar if it has a beta of 0.90; the annual one-year Treasury bill rate is 1.00%; and the expected return on the Standard & Poors 500 is 8%? Also, please explain, in a few sentences, the intuition behind your result (i.e., the relationship between beta and expected return).
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