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1. Jerry's portfolio is invested equally in five stocks (that is, each stock in the portfolio has a weight of .20) and has a required return of 9.4%. The risk-free rate is 5%, and the market risk premium is 4%. What is the portfolio's beta? Assume taht Jerry's portfolio is on SML.

1.000

1.250

1.100

.800

1.400

2. The last stock added to this portfolio was LAuren Clothing Co., which has a beta of 1.50. What was the portfolio's beta before LAuren's stock was added?

1.175

1.000

1.250

1.025

1.225

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92727022

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