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PLEASE SOLVE TO WRTE PAPER STEP BY STEP 14. Suppose two shares have the following returns and betas: Share Beta Expected return A B 1.6

PLEASE SOLVE TO WRTE PAPER STEP BY STEP

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14. Suppose two shares have the following returns and betas: Share Beta Expected return A B 1.6 0.9 19% 16% (i) (ii) What is the market risk premium obtained from the two shares What would the risk-free rate have to be if they are correctly priced

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