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25) Jay is reviewing his portfolio. He has a large amount tied up in U.S. Treasury bills paying 3%. He is considering moving some of
25) Jay is reviewing his portfolio. He has a large amount tied up in U.S. Treasury bills paying 3%. He is considering moving some of his funds from the T-bills into a stock. The stock has a beta of 1.20. If Jay believes the stock will earn 14% next year (a little better than the expected market return of 12%), should he buy the stock or leave his funds in the T-bill?
25) Jay is reviewing his portfolio. He has a large amount tied up in U.S. Treasury bills paying 3%. He is considering moving some of his funds from the T-bills into a stock. The stock has a beta of 1.20. If Jay believes the stock will earn 14% next year (a little better than the expected market return of 12%), should he buy the stock or leave his funds in the T-bill?
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