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You are analyzing a stock that has a beta of 1.13. The risk-free rate is 4.2% and you estimate the market risk premium to be

You are analyzing a stock that has a beta of

1.13.

The risk-free rate is

4.2%

and you estimate the market risk premium to be

7.9%.

If you expect the stock to have a return of

11.3%

over the next year, should you buy it? Why or why not?

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