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1) Assume that you have a security, A, that has a beta of 1 and an expected return of 5% A. Plot the SML and

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1) Assume that you have a security, A, that has a beta of 1 and an expected return of 5% A. Plot the SML and add security A to your graph B. Would you buy this asset? Why or why not? 2) Assume that you have security B, that has a beta if -1 and has an expected return of 18% A. Plot this on the graph B. Would you buy this asset? Why or why not? 3) A share of stock with a beta of 2 sells for $50. Investors expect the stock to pay a year-end dividend of $1. A. If the stock is perceived to be fairly priced today, what must be investors' expectation of the price of the stock at the end of the year

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