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    Based on the capital-asset-pricing model, what is the expected return on the above portfolio?

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    Week 6 - problem 4

    Suppose you have invested $50,000 in the following four stocks:

    Security Amount Invested Beta
    Stock A $10,000 0.7
    Stock B 15,000 1.2
    Stock C 12,000 1.4
    Stock D 13,000 1.9

    The risk-free rate is 5 percent and the expected return on the market portfolio is 18 percent.
    Based on the capital-asset-pricing model, what is the expected return on the above portfolio?

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