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A portfolio consists of the following four stocks. What is the expected return of the portfolio? (3 marks) b) Dubbo Ltd has a beta of

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A portfolio consists of the following four stocks. What is the expected return of the portfolio? (3 marks) b) Dubbo Ltd has a beta of 1.26. The government Treasury bond rate is 2% and the market risk premium is 5.8%. What is the expected return for Dubbo Ltd. What is the expected return on the market? (3 marks) c) Using a graph, explain the concept of CAPM and describe the implications of the risk return relationship depicted for financial management. (2 marks d) Explain the principle of diversification with respect to systematic and unsystematic risk. (2 mar

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