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Q5 Consider the following two investment alternatives. First, a risky portfolio that pays a a 15% rate of return with a probability of 40% or

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Q5 Consider the following two investment alternatives. First, a risky portfolio that pays a a 15% rate of return with a probability of 40% or 5% rate of return with a probability of 60%. Second, a treasury bill that pays 6%. The risk premium on the risky investment is? Q6 Consider the following two investment alternatives; first, a risky portfolio that pays a 20% ROR with a probability of 60% or 5% ROR with a probability of 40%. Second, a treasury bill that pays 6%. If you invest 50,000$ in the risky portfolio your expected profit would be? Q7 What is the standard deviation of a portfolio of two stocks given the following data; Stock A has a standard deviation of 18%. Stock B has a standard deviation of 14%. The portfolio contains 40% of stock A, and the correlation coefficient between the two stocks is -.23 Q8 Consider the CAPM. The expected Rate om the market is 18%, the expected return on a stock with a beta of 1.2 is 20% what is the risk free rate

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