Question: Consider the CAPM model. Suppose you know that the expected returns and betas of two assets are as follows: Er1=6 1=1 Er2= 10 2=2 Find

Consider the CAPM model. Suppose you know that the expected returns and betas of two assets are as follows: Er1=6 1=1 Er2= 10 2=2 Find the intercept of the CAPM equation; that is, find a of the line Er =a+b

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