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Problem 6-01 

Portfolio Beta

Your investment club has only two stocks in its

portfolio. $35,000 is invested in a stock with a beta of 0.3, and $50,000 is invested in a stock with a beta of 1.6. What is the portfolio's beta? Round your answer to two decimal places.

Problem 6-02 

Required Rate of Return

AA Corporation's stock has a beta of 0.8. The risk-free rate is 5.5% and the expected return on the market is 8%. What is the required rate of return on AA's stock? Round your answer to two decimal places.

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