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The following information applies to Q6a and Q6b Suppose stock returns are described by the...

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The following information applies to Q6a and Q6b Suppose stock returns are described by the following single factor model: ri = E[n] +B; F+ As before, assume that the model is normalized. You observe the returns for the following two well- diversified portfolios: r = 0.16 +1.5 XF r2 = 0.06 +0.5 x F Question 6a Unanswered. 5 attempts left What is the risk free rate? Express your answer in percentage terms. (Hint: use the two well- diversified portfolios to manufacture the risk free asset. See the "How to obtain rf?" slide in the Derivation of APT section of the APT slides.] Type your response Submit The following information applies to Q6a and Q6b Suppose stock returns are described by the following single factor model: ri = E[n] +B; F+ As before, assume that the model is normalized. You observe the returns for the following two well- diversified portfolios: r = 0.16 +1.5 XF r2 = 0.06 +0.5 x F Question 6a Unanswered. 5 attempts left What is the risk free rate? Express your answer in percentage terms. (Hint: use the two well- diversified portfolios to manufacture the risk free asset. See the "How to obtain rf?" slide in the Derivation of APT section of the APT slides.] Type your response Submit

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