A stock has an expected return of 0.16, its beta is 0.63, and the expected return on

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A stock has an expected return of 0.16, its beta is 0.63, and the expected return on the market is 0.1. What must the risk-free rate be?

You own a portfolio equally invested in a risk-free asset and two stocks (If one of the stocks has a beta of 0.66 and the total portfolio is equally as risky as the market, what must the beta be for the other stock in your portfolio?

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Financial management theory and practice

ISBN: 978-1439078099

13th edition

Authors: Eugene F. Brigham and Michael C. Ehrhardt

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Posted Date: Apr 23, 2024 03:31 AM

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A stock has an expected return of 0.16, its beta is 0.63, and the expected return on

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Expert Answer:

To find the riskfree rate rf we can use the Capital Asset Pricing Model CAPM formula ERi Rf betaiERm ... View the full answer

Financial management theory and practice

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