Potash Corp stock has a beta of 1.2,while Tim Horton's stock has a beta of 1.7.If the risk-free rate is 2.2%,and the market risk premium is 7%,what is the expected return on a portfolio with 40% weight in Potash and the remainder in Tim Horton's?
A) 9.4%
B) 12.7%
C) 10.5%
D) 11.6%
E) 13.25%
Correct Answer:
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