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Excerpt
LaTeX Math Block
alignmentleft
K_E = R_f + \beta \,cdot R_p

where

LaTeX Math Inline
bodyR_f

risk-free bond (like for example U.S. Treasury Bond)

LaTeX Math Inline
bodyR_p

risk premium

LaTeX Math Inline
bodyR_p = R_m - R_f
, where
LaTeX Math Inline
bodyR_m
 is historical average return of the stock market

LaTeX Math Inline
body\beta

sensitivity to the market risk for the security

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