Question: 18-2 - a. Compute the expected rate of return for a common stock which has a 1.2 beta. Assume the risk-free rate is 3.0 percent,

18-2 - a. Compute the expected rate of return for a

18-2 - a. Compute the expected rate of return for a common stock which has a 1.2 beta. Assume the risk-free rate is 3.0 percent, and the overall market expected return is 10 percent. HP b. Why is the rate you computed the expected rate? Q U 4 mm Hint: See Equation 8-6 on page 240 for CAPM equation 1 a. 17 h

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