Expected return of a portfolio using beta. The beta of four stocks-G, H, I, and J are 0.44, 0.81, 1.12, and 1.51, respectively and the beta of portfolio 1 is 0.97, the beta of portfolio 2 is 0.83, and the beta of portfolio 3 is 1.11. What are the expected returns of each of the four individual assets and the three portfolios if the current SML is plotted with an intercept of 3.0% (risk-free rate) and a market premium of 10.5% (slope of the line)?
What is the expected return of stock G?
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What is the expected return of stock H?
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What is the expected return of stock I?
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What is the expected return of stock J?
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What is the expected return of portfolio 1?
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What is the expected return of portfolio 2?
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What is the expected return of portfolio 3?
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