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Based on my answers how do i answer d and e 2. Asset J has an expected return of 10% and a beta of 1.2
Based on my answers how do i answer d and e
2. Asset J has an expected return of 10% and a beta of 1.2 and Asset K has an expected return of 9% (12 pts) and a beta of 1.0. If the risk free rate is 2% A) What is the slope of the lines for secuirty " J " and " K " that result? Expected return-risk free/beta J=.10.02/1=.667or6.67% K(.09.02)/1=.07or7% B) What would be the return on Asset J at a beta of 1.5 C) What would be the return of Asset K at a beta of 0.8 .07=(e.02)/.8 D) In order for the market to get back to equilibrium on the SML what will investors do with Asset J? E) Which is a superior investmentStep by Step Solution
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