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I need the answer as soon as possible q152 2.46. The market portfolio has a historically based expected return of 0.10 and a standard deviation
I need the answer as soon as possible
q152 2.46. The market portfolio has a historically based expected return of 0.10 and a standard deviation of 0.04 during a period when risk-free assets yield 0.03. The 0.07 risk premium is thought to be constant through time. Risk less investments may now be purchased to yield 0.09. A security has a standard deviation of 0.08 and a Co-efficient of correlation with the market portfolio is 0.85. The market portfolio is now expected to have a standard deviation of 0.04. You are required to find- a) Market's return-risk trade-off; b) Security beta; and c) Equilibrium required expected return of the security. CS Scanned with CamScannerStep by Step Solution
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