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You own a portfolio that has 2000 shares of stock A, which is priced at $13.74 per share and has an expected return of 16.74%,

You own a portfolio that has 2000 shares of stock A, which is priced at $13.74 per share and has an expected return of 16.74%, and 2000 shares of stock B, which is priced at $9.16 per share and has an expected return of 8.07%. The risk-free return is 3.90% and inflation is expected to be 3.27%. What is the risk premium for your portfolio?

9.37% (plus or minus 0.02 percentage points)

5.62% (plus or minus 0.02 percentage points)

7.50% (plus or minus 0.02 percentage points)

8.43% (plus or minus 0.02 percentage points)

None of the above is within 0.02 percentage points of the answer

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