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Stock in Company A sells for $92 a share and has a 3-year average annual
return of $21 a share. The beta value is 1.05. Stock in Company B sells for $89
a share and has a 3-year average annual return of $18 a share. The beta value
is 1.23. Derek wants to spend no more than $17,000 investing in these two
stocks, but he wants to earn at least $2700 in annual revenue. Derek also wants
to minimize the risk. Determine the number of shares of each stock that Derek
should buy.
