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You have just invested in a portfolio of three stocks. The amount of money that you invested in each stock and its net are summarized below. Calculate the beta of the portfolio and use the capital asset pricing model (CAPM) to compute the expected rate of return for the portfolio. Assume that the expected rate of return on the market is 15% and that the risk-free rate is 7%.

Stock A, Investment = $200,000, Beta=1.50,

Stock B, Investment = $300,000, Beta =0.65,

Stock C, Investment = $500,000, Beta = 1.25,

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Financial Management, Finance

Category:- Financial Management
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