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A stock costs $30. It rises to $40 with probability 0.62 and falls to $20...

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Finance

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A stock costs $30. It rises to $40 with probability 0.62 and falls to $20 with probability 0.38. The risk free interest rate is 2%. The market risk premium is 8%. (a) What is the stock's expected return? (b) What is the stock's beta? (c) Why does the stock pay a lower risk premium than the market

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