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    Exam 5: The Theory of Portfolio Allocation
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    Suppose the Expected Return on the Market Portfolio Is 10
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Suppose the Expected Return on the Market Portfolio Is 10

Question 71

Question 71

Short Answer

Suppose the expected return on the market portfolio is 10%, the risk-free rate is 2%, and the beta for an asset is 2. According to CAPM what is the expected return on the asset?

Correct Answer:

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18% = 2% +...

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