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A Stock Has a Beta of 1

Question 89

Multiple Choice

A stock has a beta of 1.30 and an expected return of 16 percent. The risk-free rate is 5 percent. If a portfolio of the two assets has a beta of 0.85, what is the weight of the stock?


A) 34.62%
B) 48.71%
C) 59.87%
D) 65.38%
E) 54.21%

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