Question: Given the following data, you would like to estimate what the return on Amazon stock could be given its beta of 1 . 1 4

Given the following data, you would like to estimate what the return on Amazon stock could be
given its beta of 1.14(as of February 2021). Other data you have collected: the rate of return on
90 day T-Bills is 1.93%; 5 year T-Notes is 3%; and on the long bond, the 30 year T Bond =3.5%.
The Prime is 7%, LIBOR is 6.5%, and the average return on the overall stock market is estimated
to be 12%. What do you expect the rate of return on Amazons stock to be? Show the formula
and the work!

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