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n Simpleland there are only two risky stocks, A and B, whose details are listed in the table below. Stock Outstanding Price Per Expected Rate
n Simpleland there are only two risky stocks, A and B, whose details are listed in the table below. Stock Outstanding Price Per Expected Rate Standard Deviation Shares Share of Return of Return A 200 $2.40 19% 30% B 300 $2.80 16% 20% Furthermore the correlation ceofficient between the returns of stocks A and B is AB = 0.30. There is also a risk-free asset, and Simpleland satisfies the CAPM model exactly. 1. [8pts] What is the expected rate of return of the market portfolio? 2. [8pts] What is the standard deviation of the market portfolio? 3. [8pts] What is the beta of stock A? 4. [8pts] What is the risk-free rate in Simpleland
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