An analyst projects a return of 21% on Portfolio A. The market risk premium is...
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Finance
An analyst projects a return of 21% on Portfolio A. The market risk premium is 11%, the volatility of the market portfolio is 14%, and the risk-free rate is 4.5%. Portfolio A has a beta of 1.5. According to the capital asset pricing model, which is true?
Return of Portfolio A had lower volatility than the market portfolio.
The expected return of Portfolio A is greater than the expected return of the market portfolio.
The expected return of Portfolio A is equal to the expected return of the market portfolio.
The expected return of Portfolio A is less than the expected return of the market portfolio.
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