Both Assets a and B Plot on the SML

question 92

Multiple Choice

Both assets A and B plot on the SML.Asset A has an expected return of 15% and a beta of 1.7.Asset B has an expected return of 12% and a beta of 1.1.What is the expected return on the market portfolio?

• A)5.0%
• B)6.5%
• C)11.5%
• D)It cannot be determined from this information.

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