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You own a portfolio that has 1 , 0 0 0 shares of stock A , which is priced at $ 1 3 . 4

You own a portfolio that has 1,000 shares of stock A, which is priced at $13.43 per share and has an expected return of 16.85%, and 3,000 shares of stock B, which is priced at $9.10 per share and has an expected return of 7.61%. The risk-free return is 4.72% and inflation is expected to be 2.75%. What is the risk premium for your portfolios
7.91%(plus or minus 4bps)
7.51%(plus or minus 4bps)
5.94%(plus or minus 4bps)
10.66%(plus or minus 4bps)
None of the above is within 4 bps of the correct answer
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