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1 B D 2 Suppose you have the following data: 3 Portfolio Expected Return Beta 4 Risk Free 6.00% 0.0 5 Market 12.00% 1.0 6

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1 B D 2 Suppose you have the following data: 3 Portfolio Expected Return Beta 4 Risk Free 6.00% 0.0 5 Market 12.00% 1.0 6 A 14.00% 2.0 7 Eri = rf + Risk Premium*beta Based on the CAPM What is the required Return on the Market using the Beta of Portfolio A? This is the SML. a. Required Return with a Beta of 2.0 = 17.00% b. Required Return with a Beta of 2.0 = 19.00% C. Required Return with a Beta of 2.0 = 18.00% d. Required Return with a Beta of 2.0 = 19.75%

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