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Calculate the expected return on the market portfolio

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Reference no: EM133002408

In a CAPM world, stock A has an expected return E [Ra] = 0.07 and stock B has an expected return of E [Rb] = 0.13. The beta for stock A is ½, while the beta for stock B is 3/2. Ignore taxes.

Calculate the expected return on the market portfolio E [Rm].

Reference no: EM133002408

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