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Expected return of a portfolio using beta. The beta of four stocks—G, H, I, and J are 0.43, 0.878?, 1.22?, and 1.57?, respectively and the beta of portfolio 1 is 1.00?, the beta of portfolio 2 is 0.84, and the beta of portfolio 3 is 1.16. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 3.0?% ?(risk-free rate) and a market premium of 11.0?% ?(slope of the? line)?

A. What is the expected return of stock? G? ?(Round to two decimal? places.)

B. What is the expected return of stock? H? ?(Round to two decimal? places.)

C. What is the expected return of stock? I? (Round to two decimal? places.)

D. What is the expected return of stock? J? (Round to two decimal? places.)

E. What is the expected return of portfolio? 1? ?(Round to two decimal? places.)

F. What is the expected return of portfolio? 2? (Round to two decimal? places.)

G. What is the expected return of portfolio? 3? ?(Round to two decimal? places.)

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92413170

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