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What expected rate of return would a security earn

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Question - A Portfolio invest in risk-free asset and the market portfolios has an expected return of 7% and a standard deviation of 10%. Suppose the risk-free rate is 4%, and standard deviation on the market portfolio is 22 %. According to the CAPM, what expected rate of return would a security earn if it had a 0.55 beta?

Reference no: EM132852913

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