You currently hold two stocks in this portfolio: $14,000 is invested in Target (TGT) and $8,000 is
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Question:
You currently hold two stocks in this portfolio: $14,000 is invested in Target (TGT) and $8,000 is invested in JCPenney (JCP).
Probability of State of EconomyTGTJCP
Recession35%12%6%
Normal54%9%7%
Boom11%-4%9%
1 What is the portfolio expected return and standard deviation?
2 You still have $14,000 invested in TGT and $8,000 invested in JCP.
If the beta of TGT is 0.65 and the portfolio beta is 1, what is the beta of JCP?
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