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Find the expected return according to the capm

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Reference no: EM132750235

Supposed Intel stock has a beta (ß) of 1.6. The risk-free rate is about 6 percent and the market risk premium is 8 percent.

Problem i. Determine the expected return according to the CAPM

= 6 + 1.6 (8)

= 18.8%

Problem ii. If the stock have a return of 14 percent over the next year, should you buy it? Why and why not?

Reference no: EM132750235

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