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Q5) The market risk premium for next period is 5.50% and the risk-free rate is 1.90%. Stock Z has a beta of 1.15 and an expected return of 8.50%. What is the: a) Market's reward-to-risk ratio? (1 point): b) Stock Z's reward-to-risk ratio (1 point): The reward-to-risk ratio is defined as: (R - Rf)/beta for the 5a portfolio in question. The market has a beta = 1. The reward-to-risk ratio is defined as: (R - Rf)/beta for the 5b portfolio in question. The market has a beta = 1Step by Step Solution
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