Stock A has a beta of 1.18 and an expected return of 14.1%. Stock B has a beta of 1.11 and an expected return of 13.4%.
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Stock A has a beta of 1.18 and an expected return of 14.1%. Stock B has a beta of 1.11 and an expected return of 13.4%.
Stock A has a beta of 1.18 and an expected return of 14.1%. Stock B has a beta of 1.11 and an expected return of 13.4%. If CAPM holds, what should the return on the risk-free asset be? The return on the risk-free asset is % (Note, risk-free interest rates can be negative such as in Germany or Japan). (Please retain at least 4 decimal places in your calculations and at least 2 decimal places in the final answer. Warning: return on the risk-free asset could be negative.)
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