Question: (Required rate of return using CAPM) a. Compute a fair rate of return for Intel common stock, which has a 1.9 beta. The risk-free rate

(Required rate of return using CAPM)

a. Compute a fair rate of return for Intel common stock, which has a 1.9 beta. The risk-free rate is 7 percent, and the market portfolio (New York Stock Exchange stocks) has an expected return of 12 percent. Using the CAPM, the fair rate of return for Intel common stock is ____ %

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b. Why is the rate you computed a fair rate?

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