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Question 2 a) Describe how correlation is related to covariance. Use the mathematical formula to illustrate your answer. (5 marks) b) The CAPM state that

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Question 2 a) Describe how correlation is related to covariance. Use the mathematical formula to illustrate your answer. (5 marks) b) The CAPM state that the expected return on a security is positively related to the security's beta. Find the expected retum of PPB. given the beta of the company, is 15. the risk-free rate is 3% and the return on the market is 10%

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