Question: Given the following data, you would like to estimate what the return on Amazon stock could be given its beta of 1.63 (as of October,

Given the following data, you would like to estimate what the return on Amazon stock could be given its beta of 1.63 (as of October, 2019). Other data you have collected: the rate of return on 90 day T-Bills is 1.93%, on 5 year T-Notes it 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 Amazon's stock to be?

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