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Security market line (SML)Assume that the risk-free rate, Upper R Subscript Upper F is currently 6% and that the market return, r Subscript m is
Security market line (SML)Assume that the risk-free rate,
Upper R Subscript Upper F is currently 6% and that the market return, r Subscript m is currently 14%.
a.Calculate the market risk premium.
b.Given the previous data, calculate the required return on asset A having a beta of 0.4 and asset B having a beta of 1.2
.
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