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Merck beta with respect to the market

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Reference no: EM131190212

Suppose the risk-free return is 2.7% and the market portfolio has an expected return of 7.2% and a volatility of 15.4%. Merck& Co.(Ticker: MRK) stock has a 18.5% volatility and a correlation with the market of 0.064.

a. What is Merck's beta with respect to the market?

b. Under the CAPM assumptions, what is its expected return?

Reference no: EM131190212

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