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Use the following data to demonstrate the equivalence of calculating the return on a portfolio based on Beta weighting and weighting of expected returns on

Use the following data to demonstrate the equivalence of calculating the return on a portfolio based on Beta weighting and weighting of expected returns on individual investments within a portfolio. Show your calculations. Market risk premium = 14% Risk free rate = 3% Beta of XYZ stock = 1.0 Beta of PDQ stock = 3.0 Beta of FMC stock = 5.0 Investment in XYZ stock = $25,000 Investment in PDQ stock = $75,000 Investment in FMC stock = $100,000 You have no assets other than your investments in XYZ, PDQ & FMC stock.

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