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i) Differentiate between CMP and SML. ii) Stock Y has a beta of 1.35 and an expected return of 14 percent. Stock Z has a
i) Differentiate between CMP and SML. ii) Stock Y has a beta of 1.35 and an expected return of 14 percent. Stock Z has a beta of 0.80 and an expected return of 11.5 percent. If the risk-free rate is 4.5 percent and the market risk premium is 7.3 percent, are these stocks correctly priced? iii) How do NPV and IRR help in deciding to undertake a project? iv) Consider the portfolio below: What are the expected return and beta of the portfolio
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