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How do you work this problem to arrive at Rf=4% ? where does the 6 for E(Ri) go? Example 3: A stock has a of

How do you work this problem to arrive at Rf=4% ?
where does the 6 for E(Ri) go? image text in transcribed
Example 3: A stock has a of 0.5 and an expected return of 6%. Expected returns on the S\&P 500 are 8%. What is the expected yield on T-bills? Solution 3: E(R) =R4+++[E(Rm)R4] 6=R1+0.5[8R4]R1=4%

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