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DrDan Is Considering Investing in a Project with Beta Coefficient

Question 183

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Dr.Dan is considering investing in a project with beta coefficient of 1.75.What would you recommend him to do if this investment has an 11.5 percent rate of return,the risk-free rate is 5.5 percent,and the rate of return on the market portfolio of assets is 8.5 percent?

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r = RF + b(rm - RF) = 0.055 + 1.75(0.085 - ...

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