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Problem 12 Intro Youve assembled the following portfolio: Stock Expected return Portfolio weight 6.5% 30% 11.9% 18.3% Part 1

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Answer #1

0.11 = 0.30(0.065) + (0.70 - w)(0.119) + w(0.183)

0.11 = 0.0195 + 0.0833 - 0.119w + 0.183w

w = 11.25%

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