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A stock has a beta of 05. The market risk premium is 6% pa and the risk free rate is 2% pa, both given as

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A stock has a beta of 05. The market risk premium is 6% pa and the risk free rate is 2% pa, both given as effective annual rates. Which at the below statements is NOT correct? Salactone a the market portfolio's total required return is 8% pa the stock's required total return is 5% pa and this is also its expected total tuture return if it's fairly priced: d. the market portfolio suddenly fell by 1% in the last 5 minutes, then the stock's price would be expected to fall by 0.5% over that same short time. If the market portfolio's total return was 10% over the last year, the stock's total historical return is expected to be 5% over the Same one year period. Next page

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