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The market portfolio is equally likely to increase 25% or decrease 10%. The risk-free rate is 3%. The stock of company A goes up 30%
The market portfolio is equally likely to increase 25% or decrease 10%. The risk-free rate is 3%. The stock of company A goes up 30% when the market goes up, and it goes down 15% when the market goes down. Explain whether or not the stock of company A is a good investment.
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