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You want to buy $20,000 worth of shares in Tootsie Roll Industries Inc. on margin, but you only have $10,000 of your own money to
You want to buy $20,000 worth of shares in Tootsie Roll Industries Inc. on margin, but you only have $10,000 of your own money to invest. The remaining $10,000 is borrowed by issuing T - Bills; assume the cost of borrowing is the risk - free rate. The weight of Tootsie Roll Industries in your portfolio is 2.0. The weight of T - Bills in your portfolio is -1.0. Assume that Tootsie Roll has a beta of 0.75. What is the beta of the portfolio? 1.50 1.75 0.75 2.00 1.25
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