Question: Security T21.5 T13.6 Beta 2.26 0.83 Expected return 21.5 13.6 I. If the current market data indicates that the risk-free rate is 3.96 percent, are

Security T21.5 T13.6
Beta 2.26 0.83
Expected return 21.5 13.6

I. If the current market data indicates that the risk-free rate is 3.96 percent, are these securities correctly priced?

II. What would the risk-free rate have to be if these securities are correctly priced?

III. If these two securities are correctly priced ( the findings of II. ) find the market risk premium

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