Assume that CAPM applies. Suppose that you know that the Stock of a company called $"$We thank you all for your patience" has a beta equal to $0\mathrm{.}7$ and a risk premium equal to $14\%.$ The risk$-$free rate happens to be equal to $5\%.$ What is the risk premium of the stock of another company called $"$We also thank you for your understanding" if it has a beta equal to $1\mathrm{.}3?$ 

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Absolutely we can leverage CAPM to find the risk premium of the second companys stock Heres how to c... View the full answer