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4 . Using a 3 . 0 % risk - free rate, and a required rate of return on portfolio of 6 . 0 %

4. Using a 3.0% risk-free rate, and a required rate of return on portfolio of 6.0%, calculate
the required rates of return on each of the alternatives using the Security Market Line equation.
Security Return Risk (beta)
High Tech 9.90%1.31
Market 8.00%1.00
U.S. Rubber 7.30%0.88
T-bills 3.00%0.00
Collections 1.20%(0.50)

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