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If You Plotted the Returns on a Given Stock Against

question 11

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If you plotted the returns on a given stock against those of the market, and if you found that the slope of the regression line was negative, the CAPM would indicate that the required rate of return on the stock should be greater than the risk-free rate for a well-diversified investor, assuming that the observed relationship is expected to continue into the future.

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Definitions:

Brightness

The level of light within an image or display, affecting how light or dark the visual appears.

Lightest Areas

Regions within an image or photograph that have the highest brightness or light intensity.

Contrast

The difference in visual properties that makes an object or its representation in an image distinguishable from other objects and the background.

Darkest

The most intense or deepest part or version of a color, or the condition of very low light levels where objects are barely visible or obscured.

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