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The risk free rate is 4%, and the required return on the marketis 12%.What is the required return on an asset with a beta of1.5?What is the reward/risk ratio given the required rate of returnfrom (a)?What is the required return on a portfolio consisting of 40% ofthe asset above and the rest in an asset with an average amount ofsystematic risk? (hint: asset with an average amount of systematicrisk has beta of 1)What is the required return on a portfolio consisting of 30% ofthe asset above and the rest in an asset with a risk freeasset?
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