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6. A group of investors is considering starting a firm. The joint distribution of the internal rate of return (IRR) for starting the firm R,

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6. A group of investors is considering starting a firm. The joint distribution of the internal rate of return (IRR) for starting the firm R, and the market portfolio retum R is assumed to be as follows: 20% 10% R,5% R: 30% 15% DX 1/8 1/16 1/8 1/16 1/4 1/16 1/16 0 1/4 a. What is the expected return for the market and for the firm? b. What is the bets for the fir? c. Should the investor group start assuming that the distribution above is correct and the risk-free interest rate is 5%? 6. A group of investors is considering starting a firm. The joint distribution of the internal rate of return (IRR) for starting the firm R, and the market portfolio retum R is assumed to be as follows: 20% 10% R,5% R: 30% 15% DX 1/8 1/16 1/8 1/16 1/4 1/16 1/16 0 1/4 a. What is the expected return for the market and for the firm? b. What is the bets for the fir? c. Should the investor group start assuming that the distribution above is correct and the risk-free interest rate is 5%

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