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Assume that both portfolios A and B are well diversified, that E ( r A ) = 9%, and E ( r B ) =

Assume that both portfolios A and B are well diversified, that E(r_A) = 9%, and E(r_B) = 8%. If the economy has only one factor, and _A = 1.3, whereas _B = 0.9, what must be the risk-free rate? (Do not round intermediate calculations.)

Risk free rate ___ %

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