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You are evaluating various investment opportunities currently available and you have calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets:
You are evaluating various investment opportunities currently available and you have calculated expected returns and standard deviations for five different well-diversified portfolios of risky assets:
Portfolio Expected Return Standard Deviation
Q 7.8% 10.5%
R 10.0 14.0
S 4.6 5.0
T 11.7 18.5
U 6.2 7.5
For each portfolio, calculate the risk premium per unit of risk that you expect to receive ([E(R) RFR]/). Assume that the risk-free rate is 3.0 percent.
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