Question: (Expected rate of return using CAPM) a.Compute the expected rate of return for Intel common stock, which has a 1.2 beta. The risk-free rate is

(Expected rate of return using CAPM)

a.Compute the expected rate of return for Intel common stock, which has a

1.2

beta. The risk-free rate is

4

percent and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of

13

percent.

b.Why is the rate you computed the expected rate?

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