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You are analyzing a stock that has a beta of 1.20. The risk-free rate is 5.0 % and you estimate the market risk premium to

You are analyzing a stock that has a beta of 1.20. The risk-free rate is 5.0 % and you estimate the market risk premium to be 6.0 %. If you expect the stock to have a return of 11.0 % over the next year, should you buy it? Why or why not?

What is the expected return according to the CAPM _____%. (Round to two decimal places.)

Should you buy the stock?Yes or No

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