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The market portfolio has a beta of __________. If a firm's beta is 1.56, the firm has _________ systematic risk than the market portfolio. 1;
The market portfolio has a beta of __________. If a firm's beta is 1.56, the firm has _________ systematic risk than the market portfolio.
| 1; more | ||
| 0.5; more | ||
| 1; less | ||
| 0; more |
10 points
QUESTION 2
Given the following, calculate the expected return of the firm according to CAPM.
Rf: 3%
Market Risk Premium: 5%
Beta of firm: 1.8
| 12.00% | ||
| 10.38% | ||
| 12.97% | ||
| 14.71%
|
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