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    Fundamentals of Investments
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    Exam 2: Diversification and Risky Asset Allocation
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    If the Future Return on a Security Is Known with Certainty
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If the Future Return on a Security Is Known with Certainty

Question 88

Question 88

Multiple Choice

If the future return on a security is known with certainty, then the risk premium on that security should be equal to


A) Zero
B) The risk-free rate
C) The market rate
D) The market rate minus the risk-free rate
E) The risk-free rate plus one-half of the market rate

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