Question: (Using the CAPM to find expected returns) a. Compute the expected rate of return for Intel common stock, which has a 1.2 beta. The risk-free

(Using the CAPM to find expected returns)

a. Compute the expected rate of return for Intel common stock, which has a 1.2 beta. The risk-free rate is 3.5 percent, and the market portfolio (composed of New York Stock Exchange stocks) has an expected return of 16 percent.

b. Why is the rate you computed the expected rate?

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