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    Expected return on Morrow's stock

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    Suppose the expected return on the market portfolio is 14.7 percent and the risk-free rate is 4.9 percent.

    Morrow Inc.stock has a beta of 1.3 Assume the capital-asset-pricing model holds.

    a. What is the expected return on Morrow's stock?

    b. If the risk-free rate decreases to 3.7 percent, what is the expected return on Morrow's

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    Solution Summary

    This provides the steps to compute the expected return on Morrow's stock