Compute a fair rate of return for Intel common sto

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.

The rate of return risk free     .06      
The Markets expected rate of return    .16      
Beta of Asset    1.2     

Why is the rate you computed a fair rate?

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