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What is the expected return of the stock for the company

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Reference no: EM132885189

Problem 1: Suppose that the expected return on the market is 10% and the risk-free rate is 3%. The correlation of a company's stock with the market is 0.75. The variance of the stock's returns is 0.16 and the variance of the market is 0.0625. According to the CAPM, what is the expected return of this stock?

Reference no: EM132885189

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