The current market price of a security is 40 the securitys, Ask an Expert

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The current market price of a security is $40, the security's expected return is 13%, the riskless rate of interest is 7%, and the market risk premium is 8%. a. What will be the security's price, if the covariance of its rate of return with the market portfolio doubles? b. How is your result consistent with our understanding that assets with higher systematic risks must pay higher returns on average?

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