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3) (10 points) Suppose that the expected return and standard deviation of the market are 9 percent and 18 percent, respectively. Stock A has a
3) (10 points) Suppose that the expected return and standard deviation of the market are 9 percent and 18 percent, respectively. Stock A has a standard deviation of 45 percent and a correlation with the market of 0.68. What would the expected return of a portfolio that is equally split between stock A, the market and a risk-free Treasury bill be if the risk-free rate is 3%
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