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Consider an asset with a beta of 1.5 , a risk-free rate of 1.18% and a market return of 8%. The reward-to-risk ratio in equilibrium
Consider an asset with a beta of 1.5 , a risk-free rate of 1.18% and a market return of 8%. The reward-to-risk ratio in equilibrium (market risk premium) is (15) %. The expected return on the asset is (16). %. Consider a portfolio with the following four securities, the portfolio beta is (17) . To lower down the portfolio beta to 1.5 while keeping other tock weight unchanged (Stock B, C, D), we need to replace part of security A's 0.133 million with T bill. The T bill weight should be (18) % of he portfolio value
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