#4. If the expected return and risk of the market portfolio are respectively 5% and 5%...

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#4. If the expected return and risk of the market portfolio are respectively 5% and 5% and the riskless rate is 1% use the CA

Answer 1

Answer #1

Project CAPM Return 7.40% =5%+0.6*(5%-1%) CAPM Return>E(Ri) | Classification Yes Over valued Yes Over valued 9.80% =5%+1.2*(5

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Answer 2

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