Calculate the expected return and beta of a portfolio

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An investor is considering the three stocks given below: stock expected return beta a 6% -10 b 13.3% 2.10 c 9.2% 0.75 market portfolio 10 % 1.00 t- bills 7% 0.00 Calculate the expected return and beta of a portfolio equally weighted between stocks B and C. Demonstrate that holding stock A actually reduces risk by comparing the risk of a portfolio equally weighted between stock B and T-Bills with a portfolio equally weighted between stocks B and A.

Reference no: EM13292721

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