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Risk - free rate: 4 % , market premium: 7 . 5 % , standard deviation of the market portfolio: 0 . 2 . Covariance
Riskfree rate: market premium: standard deviation of the market portfolio:
Covariance between Google and market:
Covariance between Boeing and market:
Portfolio composition: Google Boeing
The expected return of the portfolio is inquired.
Expected return of the portfolio?
Special Note: In problems of this nature, the typical scenario involves providing the expected return of the market. However, in this particular problem, the market premium expected return of the market riskfree rate was given. It is crucial to note that when applying beta values based on the given information, using the expected return of the market instead of the market premium would lead to an incorrect answer.
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