Average beta of the new stocks added to the portfolio

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A mutual fund manager has a 30 million portfolio with a beta of 1.5. The risk free rate is 4% and the market risk premium is 6%. 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 13%. What should be the average beta of the new stocks added to the portfolio?

Reference no: EM13766784

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