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(5) The current interest rate of Treasury bills is 4%, the average return rate of the securities market portfolio is 8%, the standard deviation of
(5) The current interest rate of Treasury bills is 4%, the average return rate of the securities market portfolio is 8%, the standard deviation of the market portfolio is 10%, and the B coefficients of stock A and stock B are 0.6 and 1.5 respectively. The standard deviations of the returns are 8% and 22% respectively.
Requirements:
Calculate the necessary rate of return of A and B stocks respectively.
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