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What is the alpha of stock

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Stock XYZ has an expected return of 13% and risk of β = 1.1. Stock ABC has expected return of 14% and β = 1.9. The market's expected return is 10% and risk free rate = 5%.

What is the alpha of each stock? Plot the SML and each stock's risk-return point on one graph. Show the alphas graphically.

Reference no: EM132459389

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