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You observe the following information in a market where the CAPM holds: beta Expected return Annual standard deviation Stock A 1.5 15.0% 0.25 Stock B

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You observe the following information in a market where the CAPM holds: beta Expected return Annual standard deviation Stock A 1.5 15.0% 0.25 Stock B 1.2 13.2% 0.30 The correlation coefficient between stock A and the market is 60%. Question 3: Compute the expected return on the market portfolio

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