A stock currently has an expected return of \20.5. The market has an expected return...
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A stock currently has an expected return of \20.5. The market has an expected return of \25.4 and the risk free rate is \3.7. Assume that the representative investor has quadratic utility. What is the new expected return on the stock if the representative investors risk aversion increases by \21.0 and the market variance decreases by \47.0 ? a. \13.15 b. \16.29 c. \24.03 d. \14.47 e. \24.80 f. \30.73
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