Question $7$

You have a $$90,000$ portfolio with a beta of $1\mathrm{.}4.$ Should you add $$10,000$ of a new stock

with a beta of $0\mathrm{.}8$ and an expected return of $7\mathrm{.}2\%$ if the risk$-$free rate is $2\%$ and the

expected return on the market is $8\%?$

No

Yes