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Suppose that there are many stocks in the security market and that the characteristics of stocks A and B are given as follows: Suppose that

Suppose that there are many stocks in the security market and that the characteristics of stocks
A and B are given as follows:
Suppose that it is possible to borrow at the risk-free rate, rf. What must be the value of the risk-
free rate? (Hint: Think about constructing a risk-free portfolio from stocks A and B.)
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