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If the expected return on the market is 20% whilst the risk-free rate is 10%, does the following description of securities constitute an equilibrium situation?
If the expected return on the market is 20% whilst the risk-free rate is 10%, does the following description of securities constitute an equilibrium situation? Why or why not? If the current state is not in equilibrium, what action will occur to bring it into equilibrium? Draw a graph of the Securities Market Line to demonstrate the current situation Security F B A 25% 1.5 B 12% 0.2 15% 0.5 D 22% 0.6 E 16% 1.2
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