What should be average beta of new stocks added to portfolio

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A mutual fund manager has a $20,000,000 portfolio with a beta of 1.5. Assume that the risk free rate is 4.5% and that the market risk premium is 5.5%. The manager expects to receive an additional $5,000,000 in funds soon. She wants to invest these funds in a variety of stocks. After making these additional investments, she wants the funds's expected return to be 13% What should be the average beta of the new stocks added to the portfolio?

Reference no: EM13335236

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