Based on capital asset pricing model

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Reference no: EM131503804

Suppose that currently Stock ZYZ promises annual rate of return of 12%. The stock’s beta is 0.75 (β = 0.75), the return on market portfolio is 11.6% and risk free rate of return is 8%. Based on Capital Asset Pricing Model (CAPM) make a recommendation on whether or not to invest in this stock. Show all work.

Reference no: EM131503804

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