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9 10 points Suppose there are two independent economic factors, My and My. The risk...

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9 10 points Suppose there are two independent economic factors, My and My. The risk free rate is 7%, and all stocks have independent firm- specific components with a standard deviation of 50% Portfolios A and B are both well diversified Portfolio on My Beta on M2 Expected Return 40 2.0 -0.5 10 Book What is the expected return-beta relationship in this economy? (Do not round Intermediate calculations. Round your answers to 2 decimal places.) References Expected retum-beta relationship EP) = BP1. PP2

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