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2. Stock X has a beta of 0.9 and an expected return of 12%. Stock Y has a beta of 1.4 and an expected return

2.

Stock X has a beta of 0.9 and an expected return of 12%. Stock Y has a beta of 1.4 and an expected return of 16%. What is the risk-free rate if these securities both plot on the security market line?

a.

4.8%
b.

4.6%
c.

4.2%
d.

4.4%
e.

5.0%

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