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You are considering investing in a certain stock. Using various tools and analyses, you anticipate that the stock will have a return of 20% over
You are considering investing in a certain stock. Using various tools and analyses, you anticipate that the stock will have a return of 20% over the coming year. The stock has a beta of 1.4. Assume that the risk free rate is 2.3%, and the expected return of the market is 7.1%. If you were to invest in this stock, what would be your abnormal return?
Hint: your answer should be the difference between the stock's anticipated return and its required return.
Enter your answer as a percentage, without the percentage sign ('%'), rounded to 1 decimal.
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