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A money manager is holding the following portfolio: Stock Amount Invested Beta 1 $300,000 0.6 2 300,000 1.0 3 500,000 1.4 4 500,000 1.8 The risk-free rate is 6% and the portfolio's required return is 12.5%. The manager would like to sell all of her holdings of Stock 1 and use the proceeds to purchase more shares of Stock 4. What would be the portfolio's required rate of return following this change? 13.63% 10.29% 11.05% 12.52% 14.33%

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Financial Management, Finance

Category:- Financial Management
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