What will be the securitys current price

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The market price of a security is $40, the securitys expected rate of return is 13%, the riskless rate of interest is 7%, and the market risk premium, [E(R„,) - R f ], is 8%.

What will be the securitys current price if its expected future payoff remains the same but the covariance of its rate of return with the market portfolio doubles?

Reference no: EM131247198

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