The risk-free rate is 6% and the market risk premium is 5%. Your $1 million...
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The risk-free rate is 6% and the market risk premium is 5%. Your $1 million portfolio consists of $300,000 invested in a stock that has a bets of 1.2 and $700,000 invested in a stock that has a beta of 0.8. Which of the following statements is CORRECT of the market risk premium remains unchanged but expected inflation increases by 2%, your portfolio's required return will increase by 2% If the stock market is efficient, your portfolio's expected return should equal the expected return on the market, which is 11% The required return on the market is 10% The portfolio's required return is more than 11%. ctory If the risk-free rate remains unchanged but the market risk premium increases by 2. Your portfolio's required return will increase by more than 29
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