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  3. consider the graph below, and assume the capm and

Consider the graph below, and assume the CAPM and SML are valid. If a stock...

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Finance

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Consider the graph below, and assume the CAPM and SML are valid. If a stock has a Beta of 1.50, its expected return should be %. E(R) SML .18 .17 .16 .15 .14 .13 .12 .11 .10 .09 .08 .07 .06 .05 .04 .03 .02 .01 .00 Beta .25 .50 .75 1.00 1.25 1.50 1.75 2.0 9% 3% 12% 15% 6%

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