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Under the Following Conditions,what Are the Expected Returns for Stocks

Question 51

Multiple Choice

Under the following conditions,what are the expected returns for stocks A and C?
λ0=0.07ba,1=0.92k1=0.04ba,2=1.10k2=0.03 bc,1=1.16 bc,2=2.35\begin{array}{ll}\lambda^{0}=0.07 & b_{\mathrm{a}, 1}=0.92 \\k_{1}=0.04 & b_{\mathrm{a}, 2}=1.10 \\\mathrm{k}_{2}=0.03 & \mathrm{~b}_{\mathrm{c}, 1}=1.16 \\& \mathrm{~b}_{\mathrm{c}, 2}=2.35\end{array}


A) 14.1% and 17.65%
B) 14.1% and 18.45%
C) 17.65% and 18.45%
D) 18.45% and 17.52%
E) None of the above

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