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Problem 12-6 Market Model The following three stocks are available in the market: Assume...

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Accounting

Problem 12-6 Market Model
The following three stocks are available in the market:
Assume the market model is valid.
a. The return on the market is 15 percent and there are no unsystematic surprises in the
returns. What is the return on each stock? (Do not round intermediate calculations
and enter your answers as a percent rounded to 2 decimal places, e.g.,32.16.)
b. Assume a portfolio has weights of 30 percent Stock A,45 percent Stock B, and 25
percent Stock C. The return on the market is 15 percent and there are no unsystematic
surprises in the returns. What is the return on the portfolio? (Do not round
intermediate calculations and enter your answer as a percent rounded to 2 decimal
places, e.g.,32.16.)
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