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Relation between risk premiums and expected returns

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Given your estimates, the expected return for Oljelund will be E(ro) = 0, 12. The risk-free interest rate equals ry = 0,04. Use the portfolio you constructed in a) to find the equilibrium expected return for H20Kraft. Control your answer by estimating the risk premium 1, and check that the relation between risk premiums and expected returns is correct for both stocks.

Reference no: EM133076343

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