W has an expected return of 12 per cent and a beta of 1.2. If the risk-free

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W has an expected return of 12 per cent and a beta of 1.2. If the risk-free rate is 3 per cent, complete the following table for portfolios of W and a risk-free asset.

Illustrate the relationship between portfolio expected return and portfolio beta by plotting the expected returns against the betas. What is the slope of the line that results?

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Corporate Finance

ISBN: 9780077173630

3rd Edition

Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe

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