4. Consider a stock with a beta of 1.2, a risk-free rate of 5%, and...
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4. Consider a stock with a beta of 1.2, a risk-free rate of 5%, and a market return of 13%. a) Interpret beta. How does the beta for this stock compare to the beta for the market? (1 point) b) What is the expected return on the stock? (1 point) c) Calculate the reward-to-risk ratio for the market. Calculate the reward-to-risk ratio for this stock. How do they compare? Explain. (2 points)
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