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R1=Risk-freerate3.50%RM=MarketReturn=11.00% RR=R4+B1(R2,R4)ERy=W4ER4+W3ER3+.2=WAA+W12+ Note: Under Priced (dellivers more than required) when: Expected Return (ER) > Required Return (RR) Falily Priced when: Expected Return (ER) = Required

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R1=Risk-freerate3.50%RM=MarketReturn=11.00% RR=R4+B1(R2,R4)ERy=W4ER4+W3ER3+.2=WAA+W12+ Note: Under Priced (dellivers more than required) when: Expected Return (ER) > Required Return (RR) Falily Priced when: Expected Return (ER) = Required Return (FR) Over Priced (delivers less than required) when: Expected Return (ER) , of EMU portfolio (Stock Andy + Stock Betty)? 6. What is the Expected Return ER, of EMU portfolio? 7. What is the required return RR, of EMU portfolio? 8. Is EMU portfolio a good, fair or poor buy considering the portfolio risk

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