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Jeanne Lewis is attempting to evaluate two possible portfolios consisting of the same five assets but held in different proportions. She is particularly interested in

Jeanne Lewis is attempting to evaluate two possible portfolios consisting of the same five assets but held in different proportions. She is particularly interested in using beta to compare the risk of the portfolios and, in this regard, has gathered the data:

Portfolio Weights (%)

Asset

Asset Beta

Portfolio A

Portfolio B

1

1.26

9

33

2

0.69

25

14

3

1.27

8

19

4

1.11

15

16

5

0.86

43

18

Total

100

100

a. The beta of portfolio A is ___ , The beta of portfolio B is___ ?

b. The required return of portfolio A is___ , The required return of portfolio A is ____ ?

_

B

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