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2012-12-05


Could anyone help me to solve this problem? Assume that the government levies a tax on risk free return-equivalent to a tax on AAA-related government bond. What effect such a tax might have on the market price of risk within the CAPM framework?Distinguishing between net borrowers and net lenders what changes in investors behaviour would you expect to take place. how about the same situation in the APT model.
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