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IncorrectQuestion 7 0 / 1 pts Use the following information: Probability w1 w2 w3 state1 0.3333333...

IncorrectQuestion 7

0 / 1 pts

Use the following information:

Probability

w1

w2

w3

state1

0.3333333

15.00%

8.00%

3.00%

state2

0.3333333

9.00%

5.00%

8.00%

state3

0.3333333

12.00%

7.00%

4.00%

% wealth invested

33.3333%

33.3333%

33.3333%

Assuming that the market rate of return over the next year is expected to be 6.5% and that the risk-free rate is expected to be 2.5%, what must the beta for security A be in order for the CAPM to hold?

  

between 2.3 and 2.4

  

between 2.2 and 2.3

  

less than 2.1

  

between 2.1 and 2.2

Solutions

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