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Portfolio Management

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You observe two portfolios HG and VL with betas of 1.20 and 0.50 and expected return of 9% and 5.5% respectively.

a. Calculate the risk free rate and the market risk premium. Write the SML function

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The solution describes the steps to calculate risk free rate, market risk premium and SML function in the given case.

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a. Calculate the risk free rate and the market risk premium. Write the SML function

In case of HG,
Beta=b=1.20
Risk free rate=rf=?
Expected return=r=9%
Market risk ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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