What expected rate of return would a security

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A portfolio that combines the risk-free asset and the market portfolio has an expected return of 7.8 percent and a standard deviation of 10.8 percent. The risk-free rate is 4.8 percent, and the expected return on the market portfolio is 12.8 percent. Assume the capital asset pricing model holds. What expected rate of return would a security earn if it had a .53 correlation with the market portfolio and a standard deviation of 55.8 percent?

Reference no: EM131884316

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