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Assume that both portfolios A and B are well diversified, that E ( r A ) = 22%, and E ( r B ) =

Assume that both portfolios A and B are well diversified, that E(r_A) = 22%, and E(r_B) = 17%. If the economy has only one factor, and _A = 1.5, whereas _B = 1.1, what must be the risk-free rate?

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