Question: Polycom and Cisco are similar size competitors in the same industry. If the risk free rate is 4 percent, and the market portfolio is expected

Polycom and Cisco are similar size competitors in the same industry. If the risk free rate is 4 percent, and the market portfolio is expected to pay 12 percent, what is the expected return on each stock if Polycoms beta is 1.50 and Ciscos beta is 0.95?

What might explain the differences in the two betas?

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