Question: True or False? Suppose the markets expected return is 10% and the risk-free rate is 3%. Suppose a single stock is 90% of the market

True or False?

Suppose the markets expected return is 10% and the risk-free rate is 3%. Suppose a single stock is 90% of the market cap of the market. If the CAPM holds, the correlation between the stock and the market must be positive, so the expected return on the stock must be greater than the risk-free rate.

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