6-3 (Required rate of return using CAPM) a. Compute a fair rate of return for Intel common stock, which has a 1.2 beta

Study Problem 6-3
6-3. (Required rate of return using CAPM)
a. Compute a fair rate of return for Intel common stock, which has a 1.2 beta. The risk-free rate is 6 percent, and the market portfolio (New York Stock Exchange stocks) has an expected return of 16 percent.
b. Why is the rate you computed a fair rate?

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