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Question 3: Stock Z has a beta of 1.1, an expected return of 12.5 percent, and lies on the security market line. A risk-free security

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Question 3: Stock Z has a beta of 1.1, an expected return of 12.5 percent, and lies on the security market line. A risk-free security is yielding 3.2 percent. You want to create a portfolio consisting of stock Z and the risk-free security such that the portfolio beta is 0.8. What rate of return should you expect to earn on your portfolio? (4 Marks) Question 4: Zardoz Company just paid an annual dividend of AED 5 on its common stock. The company decided to increase its dividend by 4 percent annually, starting next year. If the current price of the company's stock is AED 40, calculate the rate of return on this stock

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