Find how does expected return vary with beta

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Problem 1: A share of stock with a beta of 0.78 now sells for $53. Investors expect the stock to pay a year-end dividend of $5. The T-bill rate is 5%, and the market risk premium is 8%. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year?

Problem 2: How does expected return vary with beta?

Reference no: EM132763849

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