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2. Stock A B D Beta 1.5 0.8 2.5 2 ? Expected Return ? 7.40% 15.00% 2.75% E ? a. Stock E's expected return is

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2. Stock A B D Beta 1.5 0.8 2.5 2 ? Expected Return ? 7.40% 15.00% 2.75% E ? a. Stock E's expected return is 4.5% higher than the market portfolio in the economy today. What are the missing numbers in the above table if all stocks above are priced based on CAPM? (10 Points) b. Among the $20,000 you own, you invest $4,500 in the market portfolio, $2,500 in T-Bill, and the remaining amount in each of the above 5 stocks with equal amount, what is the beta of your portfolio? (5 Points)

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