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Your portfolio has a beta of 1.17. The portfolio has 10% in an S&P 500 Index, 20% in treasury bills, 25% in asset B, and

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Your portfolio has a beta of 1.17. The portfolio has 10% in an S&P 500 Index, 20% in treasury bills, 25% in asset B, and the rest in asset C. Suppose asset B is twice as risky as asset C. What is asset B's beta? (round with two decimals) (Blank 1) Suppose the risk free is 3% and the expected market return is 12%. What is the expected return of your portfolio in a competitive market? (Blank 2) Assume you believe stock C returns 15%. That means you believe stock C is overpriced. (write True or False) (Blank 3) Answer for blank #1: 1.19 x (2.25, 2.24, 2.26) Answer for blank # 2: 13.53 (33.33%) Answer for blank # 3: False (33.33%)

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