RWJ 7th Edition Solutions
We can also answer this question using the reward-to-risk ratio. All assets must have the same reward-to-risk ratio. The reward-to-risk ratio is the risk premium of the asset divided by its (. We are given the market risk premium, and we know the ( of the market is one, so the reward-to-risk ratio for the market is 0.075, or 7.5 percent. ................
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