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You are deciding whether to buy Stock A. You estimate Stock A's beta at 2 and its expected return at 10.4% over the next year.

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You are deciding whether to buy Stock A. You estimate Stock A's beta at 2 and its expected return at 10.4% over the next year. The risk-free rate is 7.9% and you estimate the market portfolio's expected return at 12.4\%. You are using the CAPM to decide if the stock's expected return is high enough to compensate you for the risk of hoiding the stock. Bosed on the CAPM, should you buy the stock? LO3 The stock's required return is 16.9%. No, you should not buy it. The stock's required return is 16.9%. Yes, you should buy it. The stock's required return is 10.35%. Yes. you should buy it. The Stock's required return is 10.35%. No, you should not buy it. Note: Clicking any button other than the Save Answer button will NOr save ony changes to your answers

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