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You have $10,000 and you want to know if Utes,LLC is a good buy. The firms total risk is 15%, its systematic risk is 1.4,
You have $10,000 and you want to know if Utes,LLC is a good buy. The firms total risk is 15%, its systematic risk is 1.4, the t-bill rate is 2.5%, the 30 year treasury rate is 3.5%, and the average market return is 8.9%. According to the CAPM, what is the expected return on Utes, LLC?
Please show formulas and steps, so I can learn.
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