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Find the average beta of the new stocks

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Reference no: EM132461566

Problem - A portfolio with a value of $40,000,000 has a beta = 1. Risk free rate = 4.25%, market risk premium = 6.00%. An additional $60,000,000 will be included in the portfolio. After that, the expected return should be 13%. Find the average beta of the new stocks to achieve the goal.

a. 1.84

b. 1.78

c. 1.76

d. 1.81

Reference no: EM132461566

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