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An asset has a standard deviation of 15% and a correlation with the market portfolio of 0.46. The market return has a standard deviation of

An asset has a standard deviation of 15% and a correlation with the market portfolio of 0.46. The market return has a standard deviation of 25%

Required

  1. Compute the beta of the asset. [5 marks]
  2. Interpret this beta value. [5 marks]
  3. If you are a risk-averse investor, would you invest in this asset? [5 marks]

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