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Suppose you are given the following information: DEF Stock: Expected Return = 15.60%, Beta = 1.8 TUV Stock: Expected Return = 9.09%, Beta = 0.96
Suppose you are given the following information: DEF Stock: Expected Return = 15.60%, Beta = 1.8 TUV Stock: Expected Return = 9.09%, Beta = 0.96 Assume that both assets are priced correctly according to CAPM. Calculate the following: Risk-free Rate = % Market Risk Premium = % Express your answers in percentage terms, rounded to 2 decimal places (ie 10.25) Suppose that you would like to combine the assets into a portfolio with a Beta equal to 1.4 What is the expected return of the portfolio? Expected Return of Portfolio = %
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