Suppose rate of return on short-term government securities

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Suppose the rate of return on short-term government securities (perceived to be risk-free) is about 7%. Suppose also that the expected rate of return required by the market for a portfolio with a beta of 1 is 15%. According to the capital asset pricing model, What would be the expected rate of return on a stock with β = 0?

Reference no: EM131309703

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