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Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 6%, and all stocks have independent firmspecific components with a
Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 6%, and all stocks have independent firmspecific components with a standard deviation of 45%. The following are well-diversified portfolios: What is the expected return-beta relationship in this economy? (Do not round intermediate calculations.) E(rp)=%+(p1%)+(p2
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