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M M Consider the following information: 1 Probability of the Rate of return if state occurs ore: : state of economy Stock 1 Stock 2

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M M Consider the following information: 1 Probability of the Rate of return if state occurs ore: : state of economy Stock 1 Stock 2 Fir Recession 0.2 14% 4% Tin Boom 0.8 11% 4% Calculate the beta of the Portfolio 1 consisting of 40% of Stock 1 and 60% of Stock 2

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