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Securities form the market portfolio

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Assume the CAPM holds. Investors are only allowed to invest in stock A and stock B (these two securities form the market portfolio). Each asset's weight in the market portfolio is simply its weight in the market portfolio. One investor invests $2,000 in stock A and $3,000 in stock B. Another investor has $5,000 invested in stock A. How much, then, has the second investor necessarily invested in stock B?

Reference no: EM133119157

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