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5. Suppose the current risk-free rate is 7.7 percent. Potpourri Inc. stock has a beta of 1.5 and an expected return of 16.7 percent. (Assume

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5. Suppose the current risk-free rate is 7.7 percent. Potpourri Inc. stock has a beta of 1.5 and an expected return of 16.7 percent. (Assume the CAPM is true.) (A) Calculate the risk premium on the market. has a beta of 0.8. on the Magnolia (B) Magnolia Industries stock Calculate the expected stock. return Suppose you have invested. $10,000 in Potpourri and Magnolia, and the beta of the portfolio is 1.255. invest in each stock? a combined total of (C) How much money did you (D) Calculate the expected return on the portfol io in part c

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