Assume both portfolios A and B are well diversified, that E(rA) = 15.0% and E(rB) = 16.8%. If the economy has only one factor, and βA = 1 while βB = 1.2, what must be the risk-free rate?

6%

Explanation:

Given that,

Assume both portfolios A and B are well diversified,

E(rA) = 15.0%

E(rB) = 16.8%

βA = 1

βB = 1.2

Therefore, the risk-free rate is calculated as follows:

1.2 × (0.15 - rf) = 1 × (0.168 - rf)

0.18 - 1.2rf = 0.168 - rf

0.18 - 0.168 = 1.2rf - rf

0.012 = 0.2rf

0.06 or 6% = rf

Hence, the risk-free rate is 6 percent.

hi : ) i found this so i hope this !

"we first find value of tax in dollars.

the difference between the two prices   is: 23. 54 - 22 = 1.54

therefore the sales tax in dollars is 1.54

the tax % will be   (amount of tax / original cost price ) × 100

(1.54 / 22) × 100  → (0.07) × 100 =   7

so the tax rate is 7%

we can double check the answer.

7 % of 22   → (7/100) × 22 → 0.07 × 22 = 1.54

22 + 1.54 = 23.54"

answer trochanter; i believe this is correct, plz check first, good luck;