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You have $20,000 to invest in a stock portfolio. Your choices are Stock A, which has a beta of 2, and Stock B, which has
You have $20,000 to invest in a stock portfolio. Your choices are Stock A, which has a beta of 2, and Stock B, which has a beta of 0.9. The risk-free rate is 3%, and the expected return on the market is 9%.
Required: If your goal is to create portfolio that has an expected return of 13.68%, how much money do you need to invest in Stocks A and B?
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