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Assume that both portfolios A and B are well diversified, that E ( r A ) = 16%, and E ( r B ) =

Assume that both portfolios A and B are well diversified, that E(rA) = 16%, and E(rB) = 14%. If the economy has only one factor, and A = 1.0, whereas B = 0.8, what must be the risk-free rate? (Do not round intermediate calculations. Round your answer to two decimal places.)

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