Question: According to the CAPM the expected return on a security is positively related to the security's beta the expected return on a security is positively
According to the CAPM the expected return on a security is positively related to the security's beta the expected return on a security is positively and non-meaty related to the security's beta the expected return on a security is positively and linearly related to the security's valance the expected return on a security is negatively and linearly related to the security's beta the expected return on a security is negatively and non-linearly related to the security's beta The Rotor co. stock is expected to earn 16% in a recession, 7% in a normal economy, and lose 3% in a booming economy. The probability of a boom is 20% while the probability of a normal economy is 55% and the charge of a recession is 25%. What is the expected rate of return on this stock
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