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You have been provided the following data about the securities of three firms, the market portfolio, and the risk-free asset. Security Expected Return Std. Deviation

You have been provided the following data about the securities of three firms, the market portfolio, and the risk-free asset.

Security

Expected Return

Std. Deviation

Correlation with the Market

Beta

Firm A

.10

.31

.55

.85

Firm B

.14

.56

.50

1.40

Firm C

.16

.65

.35

1.14

The Market Portfolio

.12

.20

1

1

The Risk- Free Asset

.05

0

0

0

Required: Draw the Security Market line (SML) and plot all the securities listed above.

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