Question
Assume that both portfolios A and B are well diversified, that E(rA) = 20%, and E(rB) = 15%. If the economy has only one factor,
Assume that both portfolios A and B are well diversified, that E(rA) = 20%, and E(rB) = 15%. If the economy has only one factor, and A = 2.0, whereas B = 1.5, what must be the risk-free rate? 0.00% 10.00% 3.25% 1.25% 0.75% None of the above
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International Financial Management
Authors: Jeff Madura
7th Edition
0324071744, 978-0324071740
