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5. Given the following information: Expected return for the market 13% Standard deviation of market return 21% Risk free rate 5% Standard deviation of stock

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5. Given the following information: Expected return for the market 13% Standard deviation of market return 21% Risk free rate 5% Standard deviation of stock A Standard deviation of stock B 25% 30% Correlation between stock A and market is 0.9 Correlation between stock B and market is 0.6 i) Calculate the beta of stock A and stock B ii) Calculate the required rate of return for each stock (3) (3)

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