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Current risk-free rates are 2.5%. And the current risk premium on the market is 6%. Given that, what is the expected (or required) return on

  1. Current risk-free rates are 2.5%. And the current risk premium on the market is 6%. Given that, what is the expected (or required) return on the following stock portfolio?

    1. $2000 in Stock A, beta of 1.2

    2. $1500 in Stock B, beta of 1.5

    3. $5000 in Stock C, beta of 0.8

Appendix A

Treasury Yield Curve Data

1 mo

3 mo

6 mo

1 yr

2 yr

5 yr

7 yr

10 yr

20 yr

30 yr

1/25/2021

0.07

0.09

0.09

0.1

0.13

0.42

0.73

1.05

1.61

1.8

1/25/2016

0.25

0.31

0.42

0.47

0.88

1.47

1.79

2.03

2.42

2.8

1/25/2011

0.15

0.16

0.18

0.27

0.62

1.96

2.68

3.35

4.23

4.48

2/9/2006

4.32

4.52

4.67

4.66

4.66

4.55

4.55

4.54

4.72

4.51

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