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Suppose an investor just found an arbitrage opportunity and she took action right away. She shorted the overpriced portland the proceeds to long the underpriced

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Suppose an investor just found an arbitrage opportunity and she took action right away. She shorted the overpriced portland the proceeds to long the underpriced portfolio that has the same rink exposure as the overpriced portfolio. Help her understand why expected return of the overpriced portfolio will increase while the expected return of the underpriced portfolio win decrease ahes svetained the arbitrage. When will these changes stop? (6 points)

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