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Which one of the following is the computation of the risk premium for an individual security? E(R) is the expected return on the security, Rp

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Which one of the following is the computation of the risk premium for an individual security? E(R) is the expected return on the security, Rp is the risk-free rate, is the security's beta, and E(RM) is the expected rate of return on the market. 1) B[E(RM) - RA 2) E(R) - [E(RM) + RA 3) E(RM) - RF 4) E(R) - E(RM)

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