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Draw the equation of the security market line

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Reference no: EM133131766

The economy risk-free rate is 2.5% and the market return is 7.6%.

1. Determine and draw the equation of the Security Market Line (SML) in this economy.

2. Determine the expected return of a stock with a beta of 1.3, another one with a beta of 1, and another one with a beta of 0.6. And represent them in the SML.

Reference no: EM133131766

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