Leslie Nunamaker owns a portfolio whose market model is expressed as rp = 1.5% + 0.90r1, +

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Leslie Nunamaker owns a portfolio whose market model is expressed as
rp = 1.5% + 0.90r1, + εpl
If the expected return on the market index is 12%, what is the expected return on Leslie's portfolio?
Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Fundamentals of Investments

ISBN: 978-0132926171

3rd edition

Authors: Gordon J. Alexander, William F. Sharpe, Jeffery V. Bailey

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