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Assume the CAPM model holds. The risk free rate is 3%. The market expected rate of return is 6%. The betas of stocks A and

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Assume the CAPM model holds. The risk free rate is 3%. The market expected rate of return is 6%. The betas of stocks A and B are 0.2 and 0.8, respectively. What is the expected rate of return of a portfolio whose weights are 50% in A and 50% in B? 1.5% 3% 6% 4.5% 7.8%

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