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What is the market risk premium

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The returns of Stock's X, Y and Z are positively, but not perfectly, correlated. Risk-free rate is 5.2% and the market is in equilibrium (required return = expected return)

Portfolio P: Half is invested in X and half is invested in Y

Portfolio Q: Invested equal amounts across all 3 stocks

What is the Market risk premium?

 

Reference no: EM131778360

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