(Answered) Lpy ltd has cash of 500000 that will be used to create an

Engineering

LPY Ltd. has cash of $500,000 that will be used to create an investment portfolio. The portfolio will be invested evenly in two assets: an equity investment that has a beta of 1.70 and a one-year risk-free interest bearing certificate. The current risk-free rate in the market is 3% and the market requires a 6% risk premium for equity securities. What one-year return should LPY Ltd. expect to earn on its portfolio?

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