Calculate the market risk premium

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i. There are three popular stocks with the following information.

Stocks Expected Return Standard Deviation Beta

Alpha 11% 17% 0.7

Bravo 13% 17% 1.3

Charlie 15% 17% 1.8

You have invested one-third of your assets in each of the three stocks. The risk-free rate is 7%, and the market is in equilibrium.

a. Calculate the market risk premium?

b. Calculate the beta of your investment?

Reference no: EM132546480

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