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2 The ns-free rate is 6%, and all stocks have independent firm specific components with a standard deviation of 42% Portfolios A and B are

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2 The ns-free rate is 6%, and all stocks have independent firm specific components with a standard deviation of 42% Portfolios A and B are both Suppose there are two independent economic factors, M1 and well diversified. Portfolio Beta on 1.5 2.3 Beta on M 2.4 -0.5 Expected Return (%) 32 10 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return-beta relationship E(rp) =

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