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Your boss has given you the following information about two stocks. Stock ticker Beta Expected return UU 1.82 19.75% QQ 0.75 8.45% He also told

Your boss has given you the following information about two stocks.

Stock ticker	Beta	Expected return
UU	1.82	19.75%
QQ	0.75	8.45%

He also told you that CAPM holds and that these stocks are fairly priced, that is, priced according to CAPM. Answer the following questions.

a.Calculate the risk-free rate.

b.Calculate the expected return on the market.

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