6. advanced analysis Suppose that the equation for the SML is Y = 0.05 + 0.04 X,...

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6. advanced analysis Suppose that the equation for the SML is Y = 0.05 + 0.04 X, where Y is the average expected rate of return, 0.05 is the vertical intercept, 0.04 is the slope, and X is the risk level as measured by beta. What is the risk-free interest rate for this SML? What is the average expected rate of return at a beta of 1.5? What is the value of beta at an average expected rate of return of 7 percent? LO37.8

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Economics

ISBN: 9781259723223

21st Edition

Authors: Campbell McConnell, Stanley Brue, Sean Flynn

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