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1.Stock A has a beta of 0.50 and Stock B has a beta of 1.25. Suppose rf is 4% and Rm is 10%. a.Applying the
1.Stock A has a beta of 0.50 and Stock B has a beta of 1.25. Suppose rf is 4% and Rm is 10%.
a.Applying the security market line, determine the expected return for Stocks A and B.
b.What is the expected return of an equally weighted portfolio of these two stocks?
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