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EX8. 2. Currently, the risk-free return is 2 percent, and the expected market rate of return is 12 percent. What is the expected return of

EX8. 2.

Currently, the risk-free return is 2 percent, and the expected market rate of return is 12 percent. What is the expected return of the following three-stock portfolio? Do not round intermediate calculations. Round your answer to two decimal places.

Investment Beta
$ 350,000 1.0
250,000 0.1
400,000 2.7

______________ %

3. Willis currently has $200,000 invested in a four-stock portfolio with a beta coefficient equal to 1.1. Willis plans to sell one of the stocks in his portfolio for $80,000, which will increase the portfolio's beta to 0.9. What is the beta coefficient of the stock Willis plans to sell? Do not round intermediate calculations. Round your answer to two decimal places.

____________

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