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1. Consider an asset with a beta of 1.5, a risk-free rate (R) of 10%, and a market return of 18%. What is the

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1. Consider an asset with a beta of 1.5, a risk-free rate (R) of 10%, and a market return of 18%. What is the expected return on the asset? 2. Investment alternatives as follows- Security HT Market USR T-Bills Coll. Expected Return 12.4% 10.5 9.8 5.5 1.0 Beta 1.32 1.00 0.88 0.00 -0.87 Assume the yield curve is flat and that r RF-8% and Rist = 10%. Calculating required rates of return.

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