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Suppose you hold a portfolio with weights equal to 0.3 and 0.7 in StockA and stock B, respectively. Suppose further that the beta of stockA

Suppose you hold a portfolio with weights equal to 0.3 and 0.7 in StockA and stock B, respectively. Suppose further that the beta of stockA is equal to 1.3 and the beta of stock B is equal to 0.6. If CAPM holds and the expected return of the market is equal to 8% and the risk-free rate has a value of 1%.



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