Business
Business, 28.05.2021 21:20, misstaejailicious200

Suppose the return on the market is expected to be 7%, a stock has a beta of 1.5, and T-bill rate is 3%. The SML would predict an expected return on the stocks of 9%. If you believe the stock will provide instead a return 11%. Its implied alpha is

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Suppose the return on the market is expected to be 7%, a stock has a beta of 1.5, and T-bill rate is...

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