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(a) Total investment risk can be broken down into two types of risk. What are these two types of risk and which

should NOT affect expected return?

(b) A firm has a beta of 1.2. The expected market return is 12% and the risk-free rate is 2%. What should be the firm's equity cost of capital? use the CAPM

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(a). The total Investment risk can be broken down into two broad categories... View the full answer

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