Question: Assume you are considering adding a third stock (Stock C) to your current portfolio. Stock A has a beta of 1.5. Stock B has a

Assume you are considering adding a third stock (Stock C) to your current portfolio. Stock A has a beta of 1.5. Stock B has a beta of .8. Information needed to calculate the beta for the third stock you are adding (Stock C) is below. You will make stock C 20% of your overall portfolio; the remainder is evenly split between stocks A and B. Expected return on the market portfolio: 12% T-bills: 3% Expected rate of return on Stock C: 21% What is the expected portfolio Beta for this three-stock portfolio?

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