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The following three stocks are available in the market: E ( R ) beta Stock A 9 . 5 0 % 1 . 1
The following three stocks are available in the market:
ERbeta
Stock A
Stock B
Stock C
Market
Assume the market model is valid. Do not round intermediate calculations. Round the answers to decimal places.
a This part of the question is not part of your Connect assignment.
b What is the expression for the return on a portfolio with weights of percent in stock A percent in stock B and percent in stock C
Return
Stock A
Stock B
Stock C
c Suppose the return on the market is percent. What is the return on a portfolio with weights of percent in stock A percent in stock B and percent in stock C
The portfolio return
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