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Suppose you forecast that the standard deviation of the market return will be 18% in the coming year. If A=4 for the measure of risk
Suppose you forecast that the standard deviation of the market return will be 18% in the coming year. If A=4 for the measure of risk aversion as measured by A = E(rM) - rF / 2M
What is the expected market risk premium?
State your answer in terms of decimals, rounding to the fourth place. E.g. 47.2865% would be entered as 0.4729
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