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QUESTION 4 Consider a stock with required return of 10.73%. If the market return is 10.65% and the risk-free rate is 1.84%, w
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Answer #1

Expected return = risk free rate + beta * market risk premium

=>

10.73% = 1.84% + beta * (10.65% - 1.84%)

=>

beta = (10.73-1.84)/(10.65-1.84)

= 1.01

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