Question
suppose you combine an individual stock with a total stock market exchange-traded fund (ETF) that tracks the performance of the entire US stock market in
suppose you combine an individual stock with a total stock market exchange-traded fund (ETF) that tracks the performance of the entire US stock market in a portfolio. (Note: An ETF is a marketable security that tracks an index, a commodity, bonds, or some other asset. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.) You invest 70% of your money in the ETF and the rest in the individual stock. The standard deviations of the individual stock and the ETF are 37% and 20%, respectively. If the standard deviation of portfolio returns is 25%, what is the individual stock's beta? Round your answer to two decimal places.
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