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Estimate the expected returns

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An analyst gives you the following estimates on betas and expected returns for three biotech stocks that she tracks:

Stock Beta Expected Return
LBT5 Inc. 0.8 12.4%
SamSam Ltd. 1.4 20.2%
Dee Money Inc. 1.8 30.8%

The analyst tells you that she used the CAPM to estimate the expected returns. Is that possible?

Reference no: EM132726366

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