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Suppose we have two risky assets, Stock I and Stock J and a risk-free asset. Stock I has an expected return of 25% and a
Suppose we have two risky assets, Stock I and Stock J and a risk-free asset. Stock I has an expected return of 25% and a beta of 1.5. Stock J has an expected return of 20% and a beta of 0.8. The risk-free asset's return is 5%. Calculate the expected returns and betas on portfolios with x% invested in Stock I and the rest invested in the risk-free asset, where x% = 0%, 50%, 100% and 150%.
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