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Suppose you have $4,000 to invest in Stocks X and Y. Stock X has an expected return of 13.5 percent and a beta of 1.2.
Suppose you have $4,000 to invest in Stocks X and Y. Stock X has an expected return of 13.5 percent and a beta of 1.2. Stock Y has an expected return of 18 percent and a beta of 2. How much should you invest in Stock X if you wish to have a portfolio beta of 1.8?
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