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You are building an investment portfolio of four (4) different stocks. However, you are considering two possible distributions of weights or proportions: Asset Beta First
You are building an investment portfolio of four (4) different stocks. However, you are considering two possible distributions of weights or proportions:
| Asset | Beta | First Portfolio | Second Portfolio |
| A | 2.5 | 10% | 40% |
| B | 1.0 | 10% | 40% |
| C | 0.5 | 40% | 10% |
| D | -1.5 | 40% | 10% |
what is the beta of each portfolio? which portfolio is riskier If the risk-free rate is 4% and the market risk premium is 5%, what rate of return would you expect from each of the portfolios?
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
6th Edition
0201538997, 978-0201538991
