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CAPM says the best way to invest in the stock market is to invest in a diversified portfolio of stocks. Design a diversified portfolio with

  1. CAPM says the best way to invest in the stock market is to invest in a diversified portfolio of stocks. Design a diversified portfolio with 7 stocks. Explain why the stocks you chose are sufficiently diversified to satisfy the requirements of CAPM. Calculate the return on your portfolio over the past 12 months. Compare it to the return on the S&P500 index. In hindsight, which one should you have put your money in and why?

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