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The Expected Return for a Stock, Calculated Using the CAPM

Question 47

Multiple Choice

The expected return for a stock, calculated using the CAPM, is 25 percent. The risk-free rate is 7.5 percent, and the beta of the stock is 0.80. Calculate the implied return on the market.


A) 7.50 percent
B) 13.91 percent
C) 17.50 percent
D) 21.88 percent
E) 14.38 percent

Correct Answer:

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