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Assume the security market line given below. Assume that analysts have estimated the Beta on the two stocks as follows: x = 0.5 and y

  1. Assume the security market line given below. Assume that analysts have estimated the Beta on the two stocks as follows: x = 0.5 and y = 2. What must the expected return on the two securities be in order for them to be a good purchase?

Ri = 0.04 + 0.08i

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