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A. suppose you forecast that the standard deviation of the market return will be 20% in the coming year. If the measure of risk aversion

A. suppose you forecast that the standard deviation of the market return will be 20% in the coming year. If the measure of risk aversion in Equation is A=4, what would be a reasonable guess for the expected market risk premium?

B. what value of A is consistent with a risk Premium of 9%

C. What will happen to the risk premium if investors became more risk-tolerant?

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