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4. The Timid Corporation has a beta of .4 and a return of 1%. The Bold Corporation has a beta of 3.5 and a return

4. The Timid Corporation has a beta of .4 and a return of 1%. The Bold Corporation has a beta of 3.5 and a return of 25%.

A. What is the market risk premium?

B. What is the risk-free rate?

C. What is your return if you invest 110% of your money in Bold and -10% in Timid?

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