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Assume both portfolios A and B are well diversified, that E(rA) = 12.6% and E(rB) = 13.6%. If the economy has only one risk factor, and βA = 1 while βB = 1.2, what must be the risk-free rate?

(Do not round intermediate calculations. Enter your answer as a percentage rounded to 1 decimal places.)

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Financial Management, Finance

Category:- Financial Management
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