Why is that rate calculated above an appropriate rate

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Intel common stock has a beta of 1.20. If the risk-free rate is 2% and the market portfolio has an expected return of 11% per annum, what is the required rate of return on Intel stock? Why is that rate calculated above an appropriate rate? Is the investor compensated for all risk associated with the stock? Show step by step how to solve using excel and its formulas or written formulas.

Reference no: EM131999412

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