Problem 12-6 Market Model The following three stocks are available in the market: ...
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Accounting
Problem Market Model
The following three stocks are available in the market:
ERbeta
Stock A
Stock B
Stock C
Market
Assume the market model is valid.
a
The return on the market is 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 decimal places, eg
b Assume a portfolio has weights of percent Stock A percent Stock B and percent Stock C The return on the market is percent and there are no unsystematic surprises in the returns. What is the return on the portfolio?
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