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1. The risk-free return is 6%. The expected return on a stock whose beta is 1.4 is 24%. a) What is the expected return on

1.The risk-free return is 6%. The expected return on a stock whose beta is 1.4 is 24%.

a)What is the expected return on the market portfolio? (5 points)

b)What is the market risk premium (MRP)? (5 points)

c)What is the risk premium if the stock (RP)? (5 points)

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