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Your broker has advised you that he believes that a stock is going to rise from $20 to $22.75 per share over the next year
Your broker has advised you that he believes that a stock is going to rise from $20 to $22.75 per share over the next year with no dividend payment. You know that the annual return on the S&P 500 has been 11.25% and the 90-day T-bill rate has been yielding 4.75% per year over the past 10 years. If beta for this stock is 1.25, will you purchase the stock?
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