You own a stock that has an expected return of 13.6 percent and a beta of...

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You own a stock that has an expected return of 13.6 percent and a beta of...

You own a stock that has an expected return of 13.6 percent and a beta of 1.3. The U.S. Treasury bill is yielding 4.2 percent and the inflation rate is 3.8 percent. What is the expected rate of return on the market?

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Answer 1

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Rf Risk free return. Market return Rm Expected Return 0.136 0.136 0.136 0.136 0.13+0.0126 0.14860 0.1486/1.3 0.114307692 11.4

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