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You expect an RFR of 10 percent and the market return (R M) of 14 percent. Compute the expected return for the following stocks. Round
You expect an RFR of 10 percent and the market return (R M) of 14 percent. Compute the expected return for the following stocks. Round your answers to two decimal places. Stock Beta E(R i ) U 0.95 % N 1.20 % D -0.25 % Choose the correct SML graph. The correct graph looks like? You ask a stockbroker what the firms research department expects for these three stocks. The broker responds with the information below. Indicate what actions you would take with regard to these stocks. Round your answers to two decimal places. Stock Current Price Expected Price Expected Dividend Estimated Return Evaluation U 25 27 0.70 % -Select- N 43 45 2.20 % -Select- D 36 40 1.05 % -Select- If you believe the appropriateness of these estimated returns, you would buy -Select- and sell -Select- . Choose the correct SML graph. Note that labels with asterisk denote estimated returns. The correct graph looks like
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