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A stock has a beta of 0.8. Using the Capital Asset Pricing Model what is the...

A stock has a beta of 0.8. Using the Capital Asset Pricing Model what is the expected return of the stock if the risk-free rate is 4% and the expected risk premium on the market is 8%?
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Answer #1

Expected return using CAPM is:-

=Risk free rate+beta*risk premium

=4%+0.8*8%

=10.40%

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