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Use the information to answer the following questions. An investor is forming a portfolio by investing $50,000 in stock A that has a beta of

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Use the information to answer the following questions. An investor is forming a portfolio by investing $50,000 in stock A that has a beta of 1.50, and $25,000 in stock B that has a beta of 0.90. The return on the market is equal to 6% and Treasury bonds have a yield of 4%. What is the weight on stock A? Select one: a. 0.6667 b. 0.3333 C. 0.25 d. 0.5 e. 0.9 Continued from previous question. Assume the predicted rate of return (expected rate of return) for Portfolio AB is 10%. Compare the required rate of return with the predicted rate of return of Portfolio AB, which of the following statements is most correct? Select one: a. The portfolio is a good buy. b. The portfolio is experiencing supernormal growth C. The portfolio should be sold. * d. The portfolio has a smaller expected return than average stocks, e. The portfolio is not paying dividends

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