A mutual fund manager has a 20 million portfolio with a

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A mutual fund manager has a $20 million portfolio with a beta of 0.85. The risk-free rate is 7.75%, and the market risk premium is 5.0%. The manager expects to receive an additional $5 million, which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund's required return to be 14%. What should be the average beta of the new stocks added to the portfolio? Round your answer to two decimal places.

Reference no: EM13620691

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