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    The risk-free rate is 7 percent. The expected market rate of return is 15 percent. If you expect stock X with a beta of 1.3 to offer a rate of return of 12 percent, should you buy this stock or short sell it? Why?

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    The risk-free rate is 7 percent. The expected market rate of return is 15 percent. If you expect stock X with a beta of 1.3 to offer a rate of return of 12 percent, should you buy this stock or short sell it? Why?

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    https://brainmass.com/business/beta-and-required-return-of-a-project/the-expected-market-rate-of-return-is-15-percent-77788

    Solution Summary

    Quick computation and rationale for answer. The expected market rate of returns is determined. The expert determines if you should buy a stock or short sell it.

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