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A friend says that she expects to earn 13.50% on her portfolio with a beta of 2.00. You have a two- asset portfolio including stock
A friend says that she expects to earn 13.50% on her portfolio with a beta of 2.00. You have a two- asset portfolio including stock X and a risk free sceurity. The expected return of stock X is 11.00% and the beta is 1.10. The expected returb on the risk free security is 3.00%. You construct a portfolio to match your friend's return. What is the beta of your portfolio?
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