Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 7%. Portfolios A
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Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 7%. Portfolios A and B are both well diversified.
Portfolio Beta on M1 Beta on M2 Expected Return
A 1.8 2.1 40%
B 2.0 -0.5 10%
What is the risk premium for M1?
Related Book For
Essentials of Investments
ISBN: 978-0077835422
10th edition
Authors: Zvi Bodie, Alex Kane, Alan J. Marcus
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