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Given a real rate of interest of 0.5%, an expected inflation premium of 5.2%, and risk premiums for investments A and B of 6.8% and
Given a real rate of interest of 0.5%, an expected inflation premium of 5.2%, and risk premiums for investments A and B of
6.8% and 10.6% respectively, find the following:
a. The risk-free rate of return, rf
b. The required returns for investments A and B
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Part 1
a. The risk-free rate of return is .%.
(Round to one decimal place.)
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