Portfolio A has a beta of 1.2. Portfolio B has a beta of 0.9. RF is 5

Question:

Portfolio A has a beta of 1.2. Portfolio B has a beta of 0.9. RF is 5 percent and the market risk premium is 3 percent. Calculate the required rate of return of A and B. If the expected rate of return for both portfolio A and B is 8 percent, what investment strategy should apply?

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...