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3. Consider the single factor arbitrage model. Assume that the beta value of security A is 1, and the expected rate of return is 16%;
3. Consider the single factor arbitrage model. Assume that the beta value of security A is 1, and the expected rate of return is 16%; the beta value of security B is 0.8, and the expected rate of return is 12%; the risk-free rate of return is 6%. If you want to take advantage of arbitrage opportunities, which security should you short (sell) and which security should ho lang (hu
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