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Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 0.65. Now suppose
Suppose you held a diversified portfolio consisting of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 0.65. Now suppose you decided to sell one of the stocks in your portfolio with a beta of 1.0 for $7,500 and use the proceeds to buy another stock with a beta of 1.30. What would your portfolio's new beta be? Do not round intermediate calculations. Round your answer to two decimal places. 6. Problem 8.07 (Portfolio Required Return) BA eBook Problem Walk-Through Suppose you are the money manager of a $3.74 million investment fund. The fund consists of four stocks with the following investments and betas: Investment $ 220,000 400,000 1,220,000 1,900,000 % Stock A B D If the market's required rate of return is 10% and the risk-free rate is 4%, what is the fund's required rate of return? Do not round intermediate calculations. Round your answer to two decimal places. Beta 1.50 (0.50) 1.25 0.75
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