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Which one of the following should earn the most risk premium based on CAPM? 1. Stock with a beta of 1.38. 2. Stock with a

Which one of the following should earn the most risk premium based on CAPM?

1. Stock with a beta of 1.38.

2. Stock with a beta of 0.74.

3. Diversified portfolio with returns similar to the overall market.

4. U.S. Treasury bill.

5. Portfolio with a beta of 1.01.

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