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Suppose there are two independent economic factors. M1 and M2. The risk-free rate is 6%, and all stocks have independent firm-specific components with a standard

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Suppose there are two independent economic factors. M1 and M2. The risk-free rate is 6%, and all stocks have independent firm-specific components with a standard deviation of 54%. What is the expected return-beta relationship in this economy? Consider the following information: Calculate the expected return of portfolio A with a beta of 1.5. What is the alpha of portfolio A. If the simple CAPM is valid, state whether the above situation is possible

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