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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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