Question: The beta for a certain stock is 1.15, the risk-free rate is 5 percent, and the expected return on the market is 13 percent. Complete

The beta for a certain stock is 1.15, the risk-free rate is 5 percent, and the expected return on the market is 13 percent. Complete the following table to decompose the stock€™s return into the systematic return and the unsystematicreturn.

Actual Returns Unexpected Returns Systematic Portion Unsystematic Portion (e) 2003 13 17 2004 21 13 2005 8-11 2006 6 14 2007 28 7

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