Estimate the market risk premium

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You are analyzing a stock that has a beta of 1.20. The risk-free rate is 5.0% and you estimate the market risk premium to be 6.0%. If you expect the stock to have a return of 11.0% over the next year, should you buy it? Why or why not? The expected return according to the CAPM is D%. (Round to two decimal places.)

Reference no: EM133112496

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