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You are considering an investment in Julie’s Jewels. The analysts in the market think highly of...

You are considering an investment in Julie’s Jewels. The analysts in the market think highly of the company. It has a beta of 1.12. The market risk premium is 7.92% and 4.34% is the risk free rate. What is the expected rate of return on this stock?

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Answer #1

Expected rate=risk free rate+Beta*market risk premium

=4.34+(1.12*7.92)

which is equal to

=13.2104%

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