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5. Assume CAPM holds: The market price of a security is $50. Its expected rate of return is 14%. The risk-free rate is 6% and

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5. Assume CAPM holds: The market price of a security is $50. Its expected rate of return is 14%. The risk-free rate is 6% and the market risk premium is 8.5%. a. What is the expected price next year? b. What will be the expected price of the security next year if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)

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