Dean of Students Office | Iowa State University

A stock above the SML has a low expected return (A stock above the SML has a high expected return) The distance a stock is above or below the SML is measured by (A stock below the SML has a high expected return. The market is currently returning 9% while the risk free asset is returning 4%. What is the return on a stock with a beta of .8? 7.2%. 13% ................
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