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2. Suppose Costco's stock has a beta of 0.4 and Weyerhaeuser's stock has a beta of 1.8. The risk-free rate is 3% and the expected

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2. Suppose Costco's stock has a beta of 0.4 and Weyerhaeuser's stock has a beta of 1.8. The risk-free rate is 3% and the expected return of the market portfolio is 12%. (a) What is the market risk premium? What does the market risk premium represent? (b) What is the expected return of Costco's stock and Weyerhaeuser's stock? () What is the beta of a portfolio that consists of $72,000 in Costco's stock and $24,000 in Weyerhaeuser's stock? How does this beta compare to the beta of the market, and what does this represent? (d) What is the expected return of the portfolio from part c

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