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Question No-4 5+5 a) What is security market line? Why must all assets plot directly on it in a well-functioning market? b) You have decided

Question No-4 5+5

a) What is security market line? Why must all assets plot directly on it in a well-functioning market?

b) You have decided to invest in an equally weighted portfolio consisting of American Express, Procter & Gamble, Home Depot, and DuPont and need to find the beta of your portfolio. Go-to fi nance.yahoo.com and find the ticker symbols for each of these companies. Now find the beta for each of the companies. What is the beta for your portfolio?

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