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Consider two mutual funds, A and B. The beta for fund A is 0.60, and the standard deviation of the rate of return = 0.20.

Consider two mutual funds, A and B. The beta for fund A is 0.60, and the standard deviation of the rate of return = 0.20. The beta for fund B. is 1.30 and its standard deviation of the rate of return = 0.325. The standard deviation of the market portfolio is 0.25. Are these funds as well diversified as possible?

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