Solved: What is the expected return on the market portfolio, Finance Basics

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What is the expected return on the market portfolio

Problem: Consider the following two stocks:

                                  Beta    Expected Return
Merck Pharmaceutical     1.4   25%
Pizer Drug Corp   0.7             14%

Assume the capital-asset-pricing model holds. Based on the CAPM, what is the risk-free rate? What is the expected return on the market portfolio?

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Finance Basics: What is the expected return on the market portfolio

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Finance Basics: What is the expected return on the market portfolio

Reference No:- TGS02038093

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