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Wilson holds a portfolio that invests equaly in three stocks (WA We Wc 1/3). Each stock is described in the following table: Stock Beta Standard

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Wilson holds a portfolio that invests equaly in three stocks (WA We Wc 1/3). Each stock is described in the following table: Stock Beta Standard Deviation Expected Return A 0.5 B 1.0 C 2.0 23% 38% 45% 1.5% 12.0% 14.0% An analyst has used market- and firm-specific information to generate expected return estimates for each stock. The analyst's expected return estimates may or may not equal the stocks' required returns. You've also determined that the risk-free rate [Rr] is 496, and the market risk premium (RPr] is 5%. Given this information, use the following graph of the security market line (SML) to plot each stock's beta and expected return on the graph. Tool tip: Mouse over the points on the graph to see their coordinates RATE OF RETURN (Percent 20 18 16 14 12 10 Stock A Stock Stock o

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