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Suppose That the Risk-Free Rate Is 5% and the Market

question 39

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Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%.Luther Industries has a volatility of 24% and a correlation with the market of .5.If you assume that the CAPM assumptions hold,then what is the expected return on Luther stock?


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Racial Differences

Variations in physical characteristics, cultural practices, and social experiences based on racial identification.

Genetically Driven

Traits, behaviors, or characteristics determined primarily by an individual's genetic make-up rather than environmental factors.

Genetically Predisposed

The inherent tendency to exhibit certain traits or behaviors based on one's genetic makeup.

Racial Group

A social category of people who share distinct physical features deemed significant by society, often used to classify individuals based on presumed shared ancestry and traits.

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