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Use the following data: Market risk premium = 14% Risk free rate = 3% Beta of XYZ stock = 1.0 Beta of PDQ stock =
Use the following data:
Market risk premium = 14%
Risk free rate = 3%
Beta of XYZ stock = 1.0
Beta of PDQ stock = 3.0
Investment in XYZ stock = $25,000
Investment in PDQ stock = $75,000
You have no assets other than your investments in XYZ and PDQ stock.
What is the expected return of your portfolio? Show all work.
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