IRA is a law firm that prospers when other firms struggle. IRA has a beta of 0.4. If the interest rate on the T-bill is 4% and the expected return on the market portfolio is 14%, what is the expected return for IRA's stock according to the CAPM. If you invested 60% of your portfolio in T-bills and 40% in IRA stock, what would your portfolio beta be?

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To calculate the expected return for IRAs stock using the Capital Asset Pricing ... View the full answer