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You want to build a portfolio equally as risky as the market, and you have $1,000,000 to invest. In your million, you already have $200,000
You want to build a portfolio equally as risky as the market, and you have $1,000,000 to invest. In your million, you already have $200,000 invested in Stock A and $250,000 in Stock B. Their betas are respectfully 0.70 and 1.10. You are left with the choice to invest in Stock C with a beta of 1.60 and the risk free rate. Given this information, how should you allocate your portfolio while maintaining your position in Stock A and B?
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