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You undertake market research and come up with the following information: Idiosyncratic risk for Snap stock (): 12% Total risk for Snap stock (i): 25%
You undertake market research and come up with the following information: Idiosyncratic risk for Snap stock (): 12% Total risk for Snap stock (i): 25% Average return of Snap stock: 16%
The market portfolio has a risk of 13% (m), and an expected return is 10%. The risk-free rate is 4%. Assume that CAPM holds.
According to CAPM, what should the expected return of Snap be?
Group of answer choices
20.87%
16.87%
10.12%
15.09%
14.12%
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