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Based on dividend yields and expected capital gains, the expected rates of return on Portfolios A and B are 12% and 10% respectively. The Beta
Based on dividend yields and expected capital gains, the expected rates of return on Portfolios A and B are 12% and 10% respectively.
The Beta of Portfolio A is 1.1, while that of B is .8. The T-Bill rate is currently 3% and the expected rate of return on the S&P 500 index is 11%.
If you currently hold a market-index portfolio, would you add either Portfolio A or B to that portfolio?
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