Question: Suppose the CAPM model determines asset returns and prices. If the risk free rate is 3%, the market expected return is 9%, and an asset

Suppose the CAPM model determines asset returns and prices. If the risk free rate is 3%, the market expected return is 9%, and an asset has a Beta of .8 and an expected return of 10%, what would you do to create alpha? What would your estimate of alpha be?

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