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Assume both portfolios A and B are well diversified, that E ( r A ) = 15.2% and E ( r B ) = 17.6%.

Assume both portfolios A and B are well diversified, that E(r_A) = 15.2% and E(r_B) = 17.6%. If the economy has only one factor, and _A = 1 while _B = 1.3,What must be the risk-free rate?

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