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You've analyzed IBM's stock and expect it to deliver a return of 9% over the next year. The stock has a beta of 0.7. The

You've analyzed IBM's stock and expect it to deliver a return of 9% over the next year. The stock has a beta of 0.7. The risk-free rate is 2.5% and the expected market risk premium is 4.5%.

What is the security's expected alpha in equilibrium according to the CAPM?

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