BODIE and MERTON - Sharif

Therefore the risk premium on stocks and real estate must be .06, the same as the market portfolio’s risk premium. The slope of the CML is .06/.1414 = .424. The point representing stocks is M, it is to the right of the CML. c. The slope of the SML is .06, and the point representing stocks is M, it is on the SML, corresponding to Beta equaling ... ................
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