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19. Variance of market returns = 0.04326 Covariance of the returns on IBM and the market = 0.0635 Market risk premium = 9.4% Expected return
19. Variance of market returns = 0.04326 Covariance of the returns on IBM and the market = 0.0635 Market risk premium = 9.4% Expected return on T-bills = 4.9% a) Write the equation of the security market line. b) Calculate the required return on this stock.
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