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Identify the relationship between these two structures.
Market Risk Premium
The additional return expected by investors for taking on the risk of investing in the stock market over a risk-free asset.
Stock Beta
A measure of a stock's volatility in comparison to the overall market. A beta higher than 1 implies greater volatility.
Risk-free Interest Rate
The theoretical return of an investment with no risk of financial loss, typically represented by government bonds.
Portfolio Beta
An indicator of the level of systematic risk or volatility in a portfolio relative to the overall market.
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