Question: Consider the single factor APT. Portfolios A and B have expected returns of 13% and 17.5%, respectively. The risk-free rate of return is 3.4%. Portfolio

Consider the single factor APT. Portfolios A and B have expected returns of 13% and 17.5%, respectively. The risk-free rate of return is 3.4%. Portfolio A has a beta of 1.52. If arbitrage opportunities are ruled out, what must the beta of portfolio B be?

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