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Covariance between asset b and the market portfolio

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Reference no: EM132684918

Assume the CAPM is the correct asset pricing model, and the risk-free rate of return is 6% and the market has an expected return and a standard deviation of 16% and 0.10%, respectively. An investor has a portfolio consisting of equal amounts in assets A and B. Asset A has an expected return of 8%. If the portfolio has an expected return of 10%, what is the covariance between asset B and the market portfolio?

 

Reference no: EM132684918

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