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What one-year return should lpy ltd expect

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LPY Ltd. has cash of $500,000 that will be used to create an investment portfolio. The portfolio will be invested evenly in two assets: an equity investment that has a beta of 1.70 and a one-year risk-free interest bearing certificate. The current risk-free rate in the market is 3% and the market requires a 6% risk premium for equity securities. What one-year return should LPY Ltd. expect to earn on its portfolio?

Reference no: EM131115766

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