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A stock has a beta of 1.18 and an expected return of 16 percent. A risk-free asset currently earns 5 percent. The beta of a

A stock has a beta of 1.18 and an expected return of 16 percent. A risk-free asset currently earns 5 percent. The beta of a portfolio comprised of these two assets is .8. What percentage of the portfolio is invested in the stock?

a. 65 percent

b. 68 percent

c. 74 percent

d. 71 percent

e. 62 percent

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