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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
    stock?

    © BrainMass Inc. brainmass.com June 3, 2020, 6:36 pm ad1c9bdddf
    https://brainmass.com/business/accounting/expected-return-on-morrow-s-stock-67145

    Solution Summary

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

    $2.19

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