Question: 1 1. Using CAPM A stock has an expected return of 13.4 percent, the risk-free rate is 3.8 percent, and the market risk premium is

1 1. Using CAPM A stock has an expected return of 13.4 percent, the risk-free rate is 3.8 percent, and the market risk premium is 7 percent. What must the beta of this stock be? [Hint: Expected market return-E(RM); Market risk premium = E(Ry)-RF]

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