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Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 7%. Portfolios A and B are both well diversified Portfolio Beta

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Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 7%. Portfolios A and B are both well diversified Portfolio Beta on M1 Beta on M2 Expected Return 1.8 2.0 2.1 0.5 40% 10% What is the risk premium for M1? O 4.47 O 5.64 O 2.36 O 9.64

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