Suppose there are two independent economic factors , M 1 and M 2 The risk-free rate is 6%, and all stocks have independent firm specific components with a standard deviation of 42% Portfolios A and Bare both well diversified Portfolio Beta on Beta on M2 Expected Return %) A 1.52.4 32 2.3-0.510 What is the expected return-beta relationship in this economy ? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) Expected return-beta relationship mathbb E (rP)= =6.00 % +BP1 BP2

Suppose there are two independent economic factors, My and M2. The risk-free rate is 6%, and all stocks have independent firm- specific components with a standard deviation of 42%. Portfolios A and Bare both well diversified. Portfolio Beta on Mi Beta on M2 Expected Return (%) 1.5 2.4 2.3 -0.5 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return-beta relationship E(IP) = 6.00% + DP1 SP2 Suppose there are two independent economic factors, My and M2. The risk-free rate is 6%, and all stocks have independent firm- specific components with a standard deviation of 42%. Portfolios A and Bare both well diversified. Portfolio Beta on Mi Beta on M2 Expected Return (%) 1.5 2.4 2.3 -0.5 10 What is the expected return-beta relationship in this economy? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Expected return-beta relationship E(IP) = 6.00% + BP SP2