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You have the following return distributions for Stock X and the market portfolio. Economic State Deep Recession Probability 0.1 Return on Market -15% Mild Recession
You have the following return distributions for Stock X and the market portfolio. Economic State Deep Recession Probability 0.1 Return on Market -15% Mild Recession 0.3 -5% Mild Expansion 0.4 10% Boom 0.2 30% a. Based on the CAPM, what is Stock X's beta?. Return on X -50% -10% 30% 40%
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