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The risk-free rate is 1.61% and the market risk premium is 6.29%. A stock with a ß of 1.30 will have an expected return of __

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Answer #1
As per CAPM
expected return = risk-free rate + beta * (Market risk premium)
Expected return% = 1.61 + 1.3 * (6.29)
Expected return% = 9.79
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