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Rita is considering investing in two assets, A and B, with betas 2.1 and 1.6 respectively. Her broker tells her that the return on the
Rita is considering investing in two assets, A and B, with betas 2.1 and 1.6 respectively. Her broker tells her that the return on the market portfolio is 14% and that the risk-free rate is 6%. Given that the expected return on both the assets is 20%, she should most likely invest in:
a) Asset B only
b) Asset A only
c) None of the assets
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