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An investor has a current portfolio valued at $8,000 with a beta of 1.1 and an expected rate of return of 10%. The investor buys
An investor has a current portfolio valued at $8,000 with a beta of 1.1 and an expected rate of return of 10%. The investor buys 100 shares of stock for $20 per share with an expected rate of return of 20% and a beta of 1.0. What is the expected rate of return for the portfolio after the purchase of the stock?
a. | 13.3% | |
b. | 10.5% | |
c. | 11.0% | |
d. | 12.0% |
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